The U.S. District Court for the Eastern District of Texas just issued its ruling invalidating the entirety of the U.S. Department of Labor’s (DOL) overtime final rule. In his ruling, Judge Sean Jordan stated that while the DOL has the authority to define and delimit the terms of the overtime exemption, “that authority ‘is not unbounded.’”
He explained that, “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 DOL’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 once again set to $35,568, and the threshold for highly compensated employees is set to $107,432. DOL may appeal the decision to the Fifth Circuit, but DOL under the new administration will almost assuredly abandon its defense of the rule. Over the next four years, it may choose to issue its own rulemaking to update the threshold.
Questions? Contact TRSA’s Vice President of Government Relations Kevin Schwalb at kschwalb@trsa.org. Click here to review the ruling.
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