On November 15, 2024, the U.S. District Court for the Eastern District of Texas vacated the Department of Labor’s (DOL) final rule raising the salary thresholds for being exempt from overtime under the Fair Labor Standards Act. The ruling applies nationwide and means that employers do not need to increase employee salaries in January 2025 to maintain their exempt status. It also vacates the July 1, 2024 increase. The court held that each of the three components of the rule exceeded the DOL’s statutory authority under the FLSA.
Previously, bona fide executive, administrative, and professional employees were exempt if they were paid a salary of at least $684 per week ($35,568 annually). The DOL’s final rule increased the threshold to $844 per week ($43,888 annually) on July 1, 2024. The threshold was set to further increase to $1,128 per week ($58,656 annually) on January 1, 2025. We expect the DOL to appeal the ruling.
The halt of the overtime rule does not impact the federal FLSA posting.
