This means that the increase in the overtime threshold scheduled to become effective on January 1, 2025 will not go into effect. The court also struck down the July 1, 2024 increase that previously went into effect. Finally, the court held that the final rule’s automatic “escalator” provision, which would have increased the threshold every three years going forward, was also unlawful.
As such, the federal minimum salary required to satisfy the executive, administrative, and professional exemptions from overtime, provided the duties’ tests are met, returns to $684/week ($35,568/year), which is the threshold that had been in place prior to the 2024 rule’s effective date.
Employers that previously adjusted the salaries or exemption status of employees who earned less than the salary threshold set by the now-invalidated July 1, 2024 increase are advised to consult with counsel before considering whether to rescind those changes on a going-forward basis.
Although the DOL could appeal the decision to the Fifth Circuit Court of Appeals, the results of the recent election and anticipated changes at the DOL with the incoming presidential administration make this move unlikely.
If you have any questions or need assistance, please don’t hesitate to reach out to Linda Pappajohn, our Director of HR Consulting Services. We’re here to help!
