The U.S. District Court for the Eastern District of Texas recently issued a ruling invalidating the entirety of the U.S. Department of Labor’s (DOL) final rule to “Define and Delimit the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees under the Fair Labor Standards Act.” In his ruling, Judge Jordan stated that while DOL has the authority to define and delimit the terms of the overtime exemption, “that authority ‘is not unbounded.’” He explained, “the minimum salary level imposed by the 2024 Rule ‘effectively eliminates’ consideration of whether an employee performs ‘bona fide executive, administrative, or professional capacity’ duties in favor of what amounts to a salary-only test.” He also said that the Department’s automatic updates to the minimum salary threshold every three years “violates the notice-and-comment rulemaking requirements of the [Administrative Procedure Act].”
In light of this decision, the minimum salary threshold is returned to $35,568, and the threshold for highly compensated employees to $107,432.
For more information, contact Claiborne Guy.