A Texas federal district court has invalidated the U.S. Department of Labor’s (DOL) final rule that aimed to raise the minimum salary threshold for overtime exemptions under the Fair Labor Standards Act (FLSA). The rule sought to adjust salary requirements for employees to qualify as exempt from overtime pay under the executive, administrative, and professional exemptions.

The court ruled that the DOL exceeded its authority by emphasizing salary over job duties in determining exemptions. This decision, which applies nationwide, reverts the threshold to the pre-2024 standards of $684/week ($35,568/year), creating challenges for employers who had prepared for the changes.

Key Takeaways for Employers

  1. Review Employee Classifications: Ensure compliance with the prior salary thresholds and duties tests.
  2. Stay Updated: Monitor potential appeals or new regulatory actions from the DOL.
  3. Plan Adjustments: Employers may need to revisit budgets or policies implemented earlier this year in anticipation of the final rule going into effect.

For more details, refer to the insights provided by Payroll.Org and Barnes & Thornburg. Reach out to our team for additional support.