A Texas federal district judge has vacated the U.S. Department of Labor’s (DOL) 2024 rule increasing the minimum salary employers must pay to exempt employees under the Fair Labor Standards Act (FLSA).  

As discussed here and here, a new federal overtime rule raising the salary threshold for overtime exemptions under the FLSA took effect July 1, 2024, with a second phase increase scheduled for January 1, 2025. In the wake of the most recent increase, multiple lawsuits were initiated to challenge the DOL’s authority to increase the minimum salary threshold. 

The district court’s ruling effectively sets aside and vacates the entirety of the 2024 rule, including the initial increase that took effect July 1, 2024, and the pending increase set for January 1, 2025.  

What Does It Mean 

Employers will not be required to comply with the January 1, 2025, increase and, at their discretion, may roll back any increases initiated in accordance with the July 1, 2024, deadline. Thresholds will automatically revert to 2019 requirements as follows:  

• Salary threshold for executive, administrative, and professional exempt employees: $684 per week, or $35,558 per year. 

• Highly compensated employee total annual compensation threshold: $107,432 annual compensation. 

• No automatic updating of these thresholds every three years. 

Employers considering reverting previously adjusted salary or exemption status to 2019 requirements should seek legal counsel to discuss the impact of such changes on employee morale, recruiting and retention.  

It is also worth noting that while an appeal is possible, it is highly unlikely given the recent election results and the changes anticipated with the incoming administration.  

NOTE: State overtime laws are not impacted by the court’s ruling.