Overtime Exemptions, Joint Employer Standards, and EEO-1 Reporting: US Labor Law Changes for Mid-2026
As we move into the second half of 2026, it’s time to look at some recent labor law amendments and new rules that are coming into effect in the US. This piece examines key federal-level developments enacted or proposed by the current administration.
Key takeaways
- Federal exempt salary thresholds have been reduced.The DOL restored the salary exemption threshold of $684 USD per week and the HCE exemption threshold of $107,432 USD per year, replacing the higher exemption levels introduced in 2024. Employers need to check state rules, since some states may still use higher thresholds.
- The DOL is proposing clearer joint employment standards. A proposed rule would create a more consistent framework for determining joint employer status under the FLSA, FMLA, and MSPA, helping organizations understand when they may share responsibility for worker rights and wages with other entities.
- Joint employment would be assessed through vertical and horizontal models. The proposal distinguishes between workers employed through intermediaries, such as staffing agencies (vertical joint employment), and workers serving two or more related entities (horizontal joint employment). Key factors include hiring/firing authority, supervision, pay control, and employment recordkeeping.
- EEO reporting requirements may be rescinded. The EEOC submitted a proposed rule that could eliminate EEO-1 through EEO-5 reporting requirements, which have long required certain employers and public entities to report workforce demographic information.
DOL restores the pre-2024 FLSA salary thresholds for overtime exemptions
On May 14, 2026, the US Department of Labor (DOL) quietly announced an amendment that restores the thresholds for overtime exemptions to pre-2024 levels. The department’s Wage and Hour Division removed regulatory language from the Code of Federal Regulations, replacing compensation thresholds from a 2024 rule with earlier, lower thresholds, effectively reducing the number of executive, administrative, and professional employees who qualify for overtime.
Under the earlier rule that was finalized in 2024, the salary threshold was set at $844 USD per week, effective on July 1, 2024. It was set to increase to $1,128 USD per week as of January 1, 2025. Annual compensation thresholds for highly compensated employees (HCEs) were set at $132,964 USD, due to increase to $151,164 USD on January 1, 2025.
The recent amendment restores the lower thresholds of $684 USD per week and annual compensation of $107,432 USD for HCEs. However, employers should note that state laws regarding overtime exemptions still apply, and some states’ exemption thresholds may be higher than those put forth in the federal law.
Sources: US Department of Labor, JD Supra
Proposed DOL joint employer rule to clarify status under the FLSA, FMLA, and MSPA
The Department of Labor has also issued a proposal that should help employers better understand the circumstances that qualify them as “joint employers” under US federal minimum wage, family medical leave, and migrant worker laws.
Issued on April 22, 2026, the DOL’s proposal — released by its Wage and Hour Division —includes multi-factor analyses that look at the amount of control a business exercises over its contractors, franchisees, and other partners. More specifically, it would provide clarity on their compliance obligations under the Fair Labor Standards Act (FLSA), the Family and Medical Leave Act (FMLA), and the Migrant and Seasonal Agricultural Worker Protection Act (MSPA).
The proposal recognizes two types of joint employment: vertical joint employment and horizontal joint employment.
Vertical joint employment
In vertical joint employment, the worker’s employment relationship is with a single employer, such as a subcontractor or staffing agency, and the worker performs work for an intermediary entity that contracts with the staffing agency or subcontractor.
Horizontal joint employment
In horizontal joint employment, the worker performs work for two or more related entities, and the working hours must be aggregated.
The four-factor analysis of vertical joint employment is meant to determine whether a potential joint employer:
- Can hire or fire the employee
- Supervises and controls the employee’s schedule or employment conditions
- Determines the employee’s rate and method of payment
- Maintains the worker’s employment records
Other factors may be used to determine the employment relationship; however, the four factors listed above are considered the most relevant.
When analyzing a horizontal joint employment relationship, employers are considered to be “sufficiently associated” if:
- They have an arrangement to share the employee’s services.
- One employer acts directly or indirectly in the interest of the other employer with respect to the employee.
- The employers share direct or indirect control of the employee based on the fact that one employer controls, is controlled by, or is under common control with the other employer.
By providing the same standard for joint employment under the FLSA, FMLA, and MSPA, the DOL provides more clarity to help employers understand when they are jointly responsible for upholding the rights and protecting the wages of an employee.
The DOL’s proposal is currently in a public comment period, which ends on June 22, 2026.
Sources: Fisher Phillips, Littler, HR Dive
EEO-1 reporting requirements may be rescinded in 2026
On May 14, 2026, the Equal Employment Opportunity Commission (EEOC) submitted a proposed rule to the Office of Information and Regulatory Affairs (OIRA). Titled “Rescission of EEO-1, EEO-2, EEO-3, EEO-4, and EEO-5, and Reporting Requirement Under Title VII, the ADA, GINA, and the PWFA,” the rule would, if approved, change reporting requirements that currently apply to employers with 100 or more employees, labor unions, state and local governments, and public and secondary school systems. (Respectively, Forms EEO-1, EEO-3, EEO-4, and EEO-5 apply to these groups. Form EEO-2 is used to report demographic information on apprenticeship program participants.)
Form EEO-1 gathers information on all of an employer’s work locations and the number of employees at each location by job category, sex, and race/ethnicity. (Forms EEO-3, EEO-4 and EEO-5 are similar to EEO-1.) The EEO-1 reporting requirement has been in place since 1966.
As of May 18, 2026, no additional information on the proposed rule was publicly available. However, its approval for publication in the Federal Register is expected after OIRA review, which should take no more than 90 days.
| Acronym | Full name |
|---|---|
| EEO | Equal employment opportunity |
| ADA | Americans with Disabilities Act |
| GINA | Genetic Information Nondiscrimination Act |
| PWFA | Pregnant Workers Fairness Act |
Source: Littler
Safeguard Global keeps close watch on global developments in labor and employment law and their potential impact on employers. For news on labor law developments outside the US and earlier news from within the US, please visit our Regulatory Hub or contact us for more information. And stay tuned for our upcoming blogs on regulatory developments at the state level and newly proposed legislation at the federal level.
Disclaimer: The information provided is for informational purposes only and does not constitute legal or professional advice. Safeguard Global disclaims any liability arising from reliance on this information. Certain content may be sourced from third parties and remains their intellectual property; all other content is owned by Safeguard Global and protected by applicable intellectual property laws. You are encouraged to seek professional or legal advice to address any issues, questions or matters arising from the information contained herein.
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