Earlier this month, the Department of Labor formally rescinded the Biden-era 2024 overtime rule, locking in a $35,568 salary threshold for white-collar exemptions. Shortly after, congressional Democrats reintroduced legislation that would push that floor to nearly $90,000 by 2030.
The bottom line: The DOL’s rescission keeps the white-collar overtime thresholds at the status quo, and the Democrats’ bill is unlikely to move in the current Congress. However, if the Democrats reclaim Congress in November, expect a legislative push to significantly increase thresholds.
The rescission: The DOL's rescission, effective May 15, restores the executive, administrative, and professional exemption threshold to $684 per week and the highly compensated employee threshold to $107,432 annually. The levels set under the 2019 Trump-era rule. The move follows two Texas federal court rulings that vacated a 2024 Biden-era rule that would have substantially increased both thresholds. The Trump administration had stopped its defense of the Biden rules ahead of the recission.
New bill: Sen. Bernie Sanders (I-VT) and Rep. Mark Takano (D-CA) reintroduced the Restoring Overtime Pay Act on May 18 in the Senate and House, respectively, proposing a phased increase to $45,000 in 2026, $55,000 in 2027, $65,000 in 2028, $75,000 in 2029, and an estimated $89,000-plus by 2030—tied to the 55th percentile of full-time salaried earnings.
The political reality: The bill is unlikely to garner any Republican support and pass in the current Congress. As a messaging bill, however, it signals where overtime policy could move if control of Congress shifts following November’s midterm elections. Raising thresholds through legislation as opposed to rulemaking would avoid some of the legal challenges that sunk the Biden administration’s attempt but would still require a Trump signature.
For CHROs:
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Companies that raised salaries or reclassified employees in 2024 anticipating the higher threshold should weigh the reputational and retention costs of reversing those changes. Pulling back may be legally permissible but operationally messy.
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Exempt status still requires passing both the salary basis and duties tests—the rescission doesn't change that scrutiny.
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State thresholds (California's is roughly double the federal floor) increasingly drive practical classification decisions for multi-state employers.
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Build payroll scenario models for a $45K-to-$89K range; a Democrat-controlled Congress or future Democrat administration could revive the higher trajectory through rulemaking without legislation. Or the current administration could theoretically introduce a new overtime rule, although raises to the thresholds are likely to be minor.
