On November 15, 2024, a federal judge in Texas ruled that the U.S. Department of Labor’s (DOL) recent changes to overtime rules under the Fair Labor Standards Act (FLSA) exceeded the agency’s authority. This decision halts the planned January 1, 2025, salary threshold increase, invalidates the July 1, 2024, salary changes, and eliminates automatic adjustments every three years.
Key Impacts of the Ruling:
- Salary thresholds revert to the DOL’s 2019 levels:
- $684 per week ($35,568 annually) for the white-collar exemption.
- $107,432 annually for the Highly Compensated Employee (HCE) exemption.
- Employers who increased salaries to meet 2024 thresholds are unlikely to reduce them, but employees reclassified as nonexempt under the 2024 rule may now return to exempt status if they meet the duties test.
What Employers Should Do:
- Review job roles to ensure employees meet the duties test for exemptions.
- Reclassify employees if necessary, with proper notice in advance.
- Periodically update compliance practices as roles evolve.
The FLSA compliance reviews offered by aHRrow remain valuable and relevant to ensuring your organization meets these requirements.
If you have any questions or need help understanding how this ruling impacts your business, contact the aHRrow team today.