BREAKING: US District Court in Texas Sets Aside Increased Salary Level Rule

In our previous article, New DOL Overtime Rule – What to Do, we wrote about the updated Department of Labor FLSA salary level rule change that took effect on July 1^st, 2024.

As of November 15^th, 2024, there have been significant changes to the DOL’s FLSA overtime rule and annual salary threshold.  A Texas Federal judge has struck down the rule, initially for just the state of Texas – but now for the entire nation. 

The court held that each of the three components of the rule exceeded the DOL’s statutory authority under the FLSA.  They claim that increasing the salary threshold as high as they did in July and then for January put too much weight on the salary requirement for determining exemption status.  The court alleges the designation should be a more balanced approach to an employee’s salary and duties.

As of this writing, the increase in salary to $58, 656 on January 1^st will no longer go into effect.  Furthermore, the increase to $43,888 that was passed in July of 2024 is no longer in effect either.  The FLSA threshold is now back to the original $35,568 annual salary.

Employers who previously raised the salaries of exempt employees to meet the July 1, 2024 increase are encouraged to seek legal counsel if they are considering going back to previous salary levels.  Any such move would need to comply with any state law regulations regarding compensation changes and address the impact on employee morale.  If employers are unsure of next steps, contacting an employment lawyer is highly reccomended.

The DOL may seek to appeal the lower court’s decision to the Fifth Circuit Court of Appeals.  AccuPay will continue to keep you informed of any updates as we see them.  If you have any questions about the proposed and now blocked DOL’s increased salary levels, please contact Jessica Wiegmann, SHRM-CP at jessica@accupay.com.