Judge Strikes Down Overtime Exemption Regulation

On Friday, Nov. 15, a U.S. District Judge for the Eastern District of Texas struck down the Department of Labor’s (DOL) April 2024 final overtime regulation, which increased the salary threshold for the “white-collar” overtime exemption under the Fair Labor Standards Act.

The DOL rule had already raised the minimum salary threshold on July 1, 2024, to $43,888 per year. It was set to increase again to $58,656 on Jan. 1, 2025. The judge stated that “the department’s changes to the minimum salary level in the 2024 rule exceeded its statutory jurisdiction.” This rule would have created an additional four million workers classified as non-exempt and eligible for overtime.

The Jan. 1, 2025, increase will not go into effect as scheduled. The court’s order, as a matter of law, nullified the $43,888 salary threshold increase that went into effect on July 1, 2024. As a result, the salary threshold reverts back to the DOL’s 2019 rule of a minimum of $35,568 annually to be exempted from overtime eligibility. Public agencies that previously adjusted employees’ salaries or exemption status should consult with their attorneys before making any additional changes to status or salaries in light of this order.

Contact KLC Personnel Services Managing Attorney Chris Johnson or KLC Personnel Services Attorney Michael Simon with any questions.