Elizabeth F. Charles, Esq., Campbell Durrant, P.C. | June 2026
The Fair Labor Standards Act requires covered employers to pay employees at least minimum wage for all hours worked, and overtime at the rate of not less than time and a half for all hours worked over forty (40) in a workweek. There are a number of exemptions to this rule, including the “white collar” exemptions.
For the “white collar” exemptions to apply, three tests must be met: (1) the employee’s job duties must primarily involve executive, administrative, or professional duties; (2) the employee must be paid a predetermined and fixed salary that is not subject to reduction; and (3) the amount of salary paid must meet a minimum specified amount. In 2004, the Department created an alternate test utilizing thresholds for Highly Compensated Employees in lieu of the three part test.
As of September 2019, the minimum salary level was raised to $684 per week, and a Highly Compensated Employee was one who is paid $107,432 or more per year. These amounts were in effect until April 2024 when levels were raised to $844 per week, effective July 1, 2024, and then an increase for HCEs to $132,964. Thresholds were set to increase again on January 1, 2025, and triennially thereafter.
In late 2024, Federal district courts in Texas vacated the rule nationwide, concluding that the Department of Labor exceeded its authority by elevating the salary level over job duties in defining the exemption. Texas v. US Dep’t of Labor, 756 F. Supp. 3d 361 (E.D. Tex. 2024) and Flint Avenue, LLC v. US Dept’t of Labor, N. 5:24-cv-00130-C Dkt. No. 62. These orders remain final judgements following the dismissal of appeal in each case by the US Court of Appeals for the Fifth Circuit on May 5 and 7, 2026. In light of these judgments, the operative version of the regulations goes back to the 2019 amounts.
In order to implement these judicial decisions, effective May 15, 2026, the DOL issued a rule that reinstated the 2019 thresholds. Thus, the standard salary threshold is back to $684 per week, and Highly Compensated Employee status returns to those who earn $107,432 or more per year. Because this is considered a technical correction, no notice and comment period preceded the change.
Pennsylvania law does not follow the Highly Compensated Employee exemption; however, Pennsylvania does follow the three part “white collar” exemption test, including the Federal weekly salary threshold.