A federal court has vacated a Labor Department rule that increased the minimum salary level for the “white-collar” overtime exemption. Therefore, the prior minimum salary threshold of $684 weekly is back in effect. The opinion came November 15 by the U.S. District Court for the Eastern District of Texas in Texas v. U.S. Dep’t of Labor.
The Biden Administration’s final rule increased the salary threshold for executive, administrative, and professional employees in two phases. First, on July 1, 2024, the minimum salary level increased to $844 per week, and it was set to increase to $1,128 per week on January 1, 2025. The rule also would have increased the minimum salary threshold for “highly compensated employees.” These changes would have made many additional employees eligible for overtime pay.
The court concluded that the rule exceeds DOL’s authority under the Fair Labor Standards Act because it uses a salary-only test instead of considering whether an employee performs bona fide executive, administrative, or professional duties.
With the rule vacated, employers can pause their plans to comply with the expected January 1, 2025, increase.
Members of the Center for Workplace Compliance (CWC), our affiliated nonprofit membership association, can read more here.