A federal court in the Eastern District of Texas has struck down the Department of Labor’s (DOL) 2024 rule increasing the minimum salary threshold for exempt employees under the Fair Labor Standards Act (FLSA). The ruling, effective immediately, is a major development for employers and employees alike.
Key Points:
- The 2024 rule would have raised the salary threshold for exempt executive, administrative, and professional employees (EAPs) from $684 to $844 per week, with planned future increases.
- The court ruled the DOL exceeded its authority by focusing on salary rather than the essential duties test, which the FLSA requires.
- The decision also struck down the automatic salary adjustments planned for future years, which bypassed the required notice-and-comment process.
Why It Matters: The court emphasized that the salary threshold has historically been a guide, not a sole determinant, for exempt status. The decision highlights the importance of a balanced duties-based analysis and confirms the need for legislative action, not regulatory changes, to make such significant adjustments.
What’s Next: The 2024 Rule is effectively void; however, the DOL has appealed the ruling to the United States Court of Appeals for the Fifth Circuit. While it is highly unlikely that the rule would be put back in place before January 1, 2025 even if the appeal is expedited, employers and HR teams should stay tuned for any updates.
