Federal Overtime Exempt Salary Thresholds

On November 15, 2024, the United States District Court for the Eastern District of Texas blocked the US DOL Overtime Exemptions Rule from July 2024. The US DOL Overtime Exemptions Rule raised the minimum salary required to be paid to most employees classified as exempt from overtime and minimum wage requirements under the Fair Labor Standards Act’s (FLSA) white-collar overtime exemption.

This ruling not only blocks phase 2 of the minimum salary increase set to go into effect on January 1, 2025 but also vacates the initial increase that went into effect in July 2024.

The court’s order invalidates the rule nationwide effective immediately, and the salary test for this determination reverts back to what it has been, $684 per week ($35,568 annually) and the HCE threshold at $107,432 annually.

It is expected that the DOL may appeal this ruling, but for now, businesses should operate without the initially anticipated January 1, 2025 increase. We will keep you updated should the ruling change. If you have any questions, our Payroll Team would be happy to discuss your situation.