Great news for employers! A Federal Judge has struck down the U.S. Department of Labor’s overtime rule that increased the salary threshold for classifying employees as “exempt” from overtime pay requirements under the Fair Labor Standards Act (FLSA). This means that the DOL’s rule set to take effect on January 1, 2025 (which would have significantly increased the salary threshold making millions more eligible for overtime) will not be going into effect.

U.S. District Judge Sean Jordan for the Eastern District of Texas found that the DOL exceeded its authority in making changes to the minimum salary level. Additionally, the Judge found that the DOL’s rule set the salary component of the test so high that it made other parts of the analysis irrelevant (such as the consideration of job duties).

As we wrote about earlier this month, employees making less than $58,656/year would have become eligible for overtime pay on January 1, 2025, up from the current threshold of $43,888 that took effect on July 1, 2024 under the first phase of the DOL rule.  U.S. District Judge Jordan’s ruling restores the salary threshold to $35,568, which is the threshold that existed prior to the DOL’s new rule.

If you have any questions or need assistance with issues created by this development, please contact one of our Wessels Sherman Attorneys.