As anyone who follows my blogs know, the United States Department of Labor (“USDOL”) implemented new overtime rules that went into effect on July 1, 2024, that increased the salary threshold that had to be met in order for an employee to be deemed exempt and ineligible for overtime payments. The goal of this change in the law was to expand overtime eligibility for employees who previously would not have qualified to receive such payments. On November 15, 2024, a federal judge in Texas found that this new overtime rule was legally invalid and issued an injunction that now prohibits implementation of this rule nationwide.
The Texas judge ruled that the DOL exceeded its statutory authority with the 2024 rule that raised the salary threshold from $35,568 to $43,888, effective July 1, 2024, and later to $58,656, effective January 1, 2025. The rule also included automatic triennial updates to the threshold. In light of this decision, Employers no longer need to adjust salaries or reclassify employees to comply with this at present invalid rule. The current overtime threshold at least for now therefore remains at $35,568.
This ruling is likely to be appealed, so we will see if anything changes regarding the decision, though with a new administration taking control in Washington in January 2025, there is a significant chance that this changed overtime rule will be abandoned by the incoming USDOL and the old salary threshold will continue to remain the applicable legal standard.
