Salary Threshold Increase for Exempt Employees Blocked by Federal Court
On November 15, 2024, a federal judge in the Eastern District of Texas held that the Department of Labor’s (“DOL”) increase to the minimum salary threshold for exemption from overtime payment exceeded the DOL’s statutory authority. The DOL’s rule had increased the salary threshold from $684/week to $884/week in July of 2024, and was set to increase the threshold again to $1,128/week on January 1, 2025. The court’s ruling in Texas v. United States Dep’t of Lab., No. 4:24-CV-468-SDJ (E.D. Tex.) held that the July 2024 and the January 2025 salary threshold increases were null and void.
This holding means that employers will not need to raise the minimum salary of non-exempt employees to $1,128/week. The minimum salary for non-exempt employees will revert back to $684/week, or $35,568/year. While the DOL could appeal the Texas federal court’s ruling to the Fifth Circuit Court of Appeals, an appeal is widely viewed as unlikely due to the policy views of the incoming Trump administration.
What this means for employers: the minimum salary required for a salaried exempt employee is $684/week or $35,568/year. Employees must also meet the duties test as established under the FLSA. There are no increases to the salary threshold anticipated in the near future.
(Jeff Worley practices in the areas of employment law, business law and general litigation. Jeff is a member of the firm’s Advocacy Group and Corporate Practice Group. Jeff also provides training to employers on a wide range of topics.)