On November 15, 2024, the U.S. District Court for the Eastern District of Texas invalidated the Department of Labor’s (DOL) Final Overtime Rule, effectively halting its enforcement nationwide.
The 2024 rule had significantly increased the minimum salary levels required for employees to qualify as overtime-exempt under the Fair Labor Standards Act (FLSA) white-collar exemptions. Here’s what the ruling means for employers:
What was the Rule?
The DOL’s rule raised the minimum weekly salary thresholds for most overtime-exempt employees as follows:
- $844 per week ($43,888 annually) beginning July 1, 2024
- $1,128 per week ($58,656 annually) beginning January 1, 2025
Additionally, the rule set automatic increases every three years after 2025.
What Changes Now?
With the court’s decision, the rule is no longer enforceable. The salary thresholds revert to pre-rule levels:
- $684 per week ($35,568 annually) for white-collar exemptions.
Employers across the U.S. must now follow these previous thresholds unless their state requires higher salary levels.
What About State Laws?
States with stricter salary requirements—such as California, Colorado, New York, and Washington—remain unaffected by this ruling. Employers in these states must continue to comply with state-specific laws, which often mandate higher thresholds.
What’s Next?
While the court’s ruling brings immediate changes, the Department of Labor may appeal the decision. Employers should stay vigilant and monitor further legal developments to ensure compliance.
For personalized guidance on how this ruling impacts your organization and to ensure seamless compliance with federal and state laws, contact your CGO Representative today. Our team of HR experts is here to help you navigate these changes with confidence and keep your business running smoothly. If you're interested in working with our HR experts, please reach out to us at info@gocgo.com.
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