Overtime Rule Blocked

Under the Fair Labor Standards Act (FLSA), employees must be paid a minimum wage and must earn overtime for every hour over 40 hours in a work week. Certain employees, however, may be exempt from these requirements if (i) they earn a base minimum salary; and (ii) if they satisfy the job duties provided in the corresponding regulations. In April, the Department of Labor (DOL) announced a final rule that increased the minimum salary threshold from $35,558 to $43,888 effective July 1, 2024. Further, the rule called for an additional increase to $58,656 effective January 1, 2025, and for automatic increases every three years thereafter based on inflation.

Last Friday, November 15, 2024, a United States District Court Judge in Dallas Texas issued a nationwide injunction that blocked all aspects of the DOL’s new rule. Specifically, she found that the methodology used to calculate both the July increase and the pending January increase violated the language of the FLSA itself. Consequently, the minimum salary threshold has now fallen back to $35,558. Additionally, she found that the DOL lacked the authority under FLSA to lock in automatic future increases.

The DOL can appeal the judge’s decision. With a new administration set to take office in late January, it seems likely that the DOL will abandon the fight and that the pre-April 2024 status quo will return.

(A quick video breakdown is also available here!)