Employment Law Alert: Federal Court Blocks DOL’s Overtime Rule
On November 15, 2024, the U.S. District Court for the Eastern District of Texas struck down the U.S. DOL rule that increased the salary threshold required to exempt a salaried bona fide executive, administrative, or professional employee from overtime pay requirements on the grounds that the DOL exceeded its authority. Under the DOL’s rule, the minimum salary threshold increased from $684 per week ($35,568 annualized) to $844 per week ($43,888 annualized) effective July 1, 2024. The salary threshold was set to increase a second time to $1,128 per week ($58,656 annualized) effective January 1, 2025. The rule also increased the minimum total annual compensation level for the highly compensated employee exemption from $107,432 to $132,964 effective July 1, 2024 and to $151,164 effective January 1, 2025.
The court’s ruling retroactively voids the previously mandated July increase. While the situation is still evolving, as a result of this ruling the salary threshold should revert to the 2019 standard of $684 per week, or $35,358 per year. But if you already made salary adjustments based on the July 2024 increase, or have announced increases in anticipation of the January 2025 proposed change, please talk to your legal counsel before you make any new changes!
It is unlikely that the DOL will appeal this decision in light of the upcoming change in administration. That said—many states have wage laws that are not impacted by this new federal injunction.