On November 15, 2024, the U.S. District Court for the Eastern District of Texas invalidated the Department of Labor’s (DOL) 2024 Final Rule, which had significantly raised salary thresholds for employees exempt from overtime under the Fair Labor Standards Act (FLSA). The decision halts salary increases implemented in July 2024, cancels planned increases for January 2025, and eliminates the rule’s provision for automatic adjustments every three years. This nationwide ruling reverts exempt salary thresholds to pre-July 2024 levels.

The now-vacated rule would have raised the salary threshold for executive, administrative, and professional (EAP) employees from $684 per week ($35,568 annually) to $844 per week ($43,888 annually) as of July 2024, with further increases planned.  The court ruled these changes overstepped the DOL’s authority by emphasizing salary over job duties.

This decision leaves employers with key choices: whether to maintain salary increases or revert to pre-July thresholds. Employers should also review job descriptions to ensure compliance with the duties test for exemption. While federal changes are paused, businesses must still comply with stricter state regulations.