Last April, the U.S. Department of Labor (DOL) made significant changes to the overtime pay rules. The most significant was a change made to the overtime pay thresholds. There is an exemption for executives, administrative and professionals that earn a specific salary. Employees that meet the salary threshold ($684 per week/$35,568 annually) are not eligible for overtime pay under the DOL’s rules. Earlier in 2024 the DOL raised the salary threshold, thereby making more employees eligible for overtime. However, the Federal Court in Texas has vacated the rules. As noted by the Pillsbury law firm in DC:
“While there are several components to the test for determining if an employee is exempt from overtime pay requirements, the increasingly dominant part of the test is the minimum salary an employee must make to be deemed exempt. Prior to the Department of Labor’s changes this Spring, an employee had to be paid at least $684 per week ($35,568 annually) to qualify as exempt. The new rules increased that threshold to $844 per week ($43,888 annually) as of July 1, 2024, and would have further increased the threshold to $1,128 per week ($58,656 annually) on January 1, 2025, with that threshold then being adjusted in 2027 and every three years thereafter based on updated earnings data.”
The court's decision applies nationwide and vacates the new DOL rule as to all employers including broadcasters. It also vacated other DOL rules concerning highly paid employee exemption. The court ruled that the DOL exceeded its authority. It is not clear whether the new Trump administration will appeal this decision.
You can see a good summary of the decision from our friends at the DC law firm Pillsbury here.
You can see an additional discussion regarding the court’s decision from the law firm of Holland and Knight here.