Last updated: December 20, 2024
On November 15, 2024, a federal court in Texas issued a ruling striking down the 2024 final overtime rule from the U.S. Department of Labor (DOL) The DOL overtime rule would have required most employees earning less than $58,656 per to be entitled to overtime compensation beginning on January 1, 2025, The first phase of the overtime rule had increased the salary threshold from $35,656 per year to $43,888 per year, beginning on July 1, 2024. The November 15, 2024 court ruling resets the salary threshold to $35,656.
DOL has filed a notice that it intends to appeal the court ruling that stops the 2024 overtime rule from taking effect. For now, the appeal does not change the effect of the court's ruling, which means that the salary threshold for exempt employees remains at $35,568 per year ($684 per week). DOL will almost certainly drop its appeal after the change in administrations in January 2025, meaning that the current salary threshold should remain in place, at least for the next few years.
Separately, in September, the U.S. Court of Appeals for the Fifth Circuit ruled in Mayfield v. U.S. Department of Labor that DOL has the authority to set a salary threshold for FLSA exemption. The court found that the language in FLSA granting DOL the authority to “define” and “delimit” the terms “administrative”, “executive”, and “professional” includes the authority to set a minimum salary threshold for exempt white-collar employees. This decision appears to undercut an assertion in a dissenting opinion from a 2023 U.S. Supreme Court case (Helix Energy Solutions Group v. Hewitt) in which Justices Brett Kavanaugh and Samuel Alito suggested that DOL may not have the authority to set a salary threshold for exempt employees.
For more on the now invalid 2024 overtime rule, see the Center's summary of what nonprofits need(ed) to know about the rule.
