On November 15, 2024, a Texas federal judge found that the U.S. Department of Labor (“DOL”) did not have authority to raise the minimum salary thresholds for the Fair Labor Standards Act (“FLSA”) overtime exemption. (Click here to view the decision) The effect of this ruling in Texas vs. the Department of Labor was to strike down the regulation (“2024 Rule Change”) nationwide and invalidate past and future increases in the minimum salary test for exempt employees. (The DOL 2024 Rule Change raised the minimum salary level on July 1, 2024, to $43,888 per year, which was set to increase to $58,656 per year on January 1, 2025.)

The 2024 Rule Change increase applied to employees exempt under the FLSA’s executive, administrative, and professional (“EAP”) employee overtime exemption. To qualify for the EAP exemption, the position must meet both the duties test and salary level test. The court ruled that “because the EAP Exemption requires that an employee’s status turn on duties—not salary—and because the 2024 Rule’s changes make salary predominate over duties for millions of employees, the changes exceed the Department’s authority to define and delimit the relevant terms.”

Gust Rosenfeld will continue to monitor the status of this case and provide updates. If you have questions, contact any of our employment law attorneys.