Department of Labor unlikely to pursue an appeal
By Ernest B. Orsatti, Esq.
On April 23, 2024, the U.S. Department of Labor (DOL) announced a final overtime rule, Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees. This was the second time in seven years the DOL introduced a rule aimed at increasing the standard salary level and highly compensated employee total annual compensation threshold under the Fair Labor Standards Act (FLSA). As in 2017, a federal court in Texas struck down the rule. On November 15, 2024, in State of Texas v. Dep’t of Labor, 24-cv-468-SDJ, the U.S. District Court for the Eastern District of Texas vacated the rule, contending it exceeded the DOL’s authority.
[B]ecause the EAP Exemption requires that an employee’s status turn on duties—not salary—and because the 2024 Rule’s changes make salary predominate over duties for millions of employees, the changes exceed the Department’s authority to define and delimit the relevant terms.
Judge Sean D. Jordan further opined, “As was true of the 2016 rule, the minimum salary level imposed by the 2024 rule ‘effectively eliminates’ consideration of whether an employee performs ‘bona fide executive, administrative, or professional capacity’ duties in favor of what amounts to a salary-only test.”
The 2024 Rule would have been implemented in three stages: (1) increase of the minimum salary level from $684 per week to $844 per week starting July 1, 2024; (2) increase of the minimum salary level from $844 per week to $1,218 per week starting on January 1, 2025; and (3) automatic increases in the salary level every three years based on available earnings data with the first automatic increase beginning on July 1, 2027. This court decision, which applies nationwide, vacates the July 1, 2024 increase and eliminates the scheduled January increase.
If you have questions regarding overtime payment or potential wage and hour violations, contact us at 866-986-4424 or contact us online.
