According to a Texas Federal Judge on Friday, the United States Department of Labor lacked authority to raise the salary threshold for the Fair Labor Standards Act white collar overtime exemptions. The Court’s ruling strikes down on a nationwide basis the Biden Administration rule that has been in effect since July.
The Court rules that each of the three components of the rule exceeded the DOL’s authority under the FLSA. Not only did the Court strike down the increase to the exemption's salary threshold scheduled to go into effect on January 1, 2025, but also the prior increase that went into effect on July 1, 2024. Further, the Court ruled that the additional increases scheduled every three years were unlawful.
Based on the Court’s ruling, it is clear that the January 1, 2025, increase will not go into effect as scheduled and the July 1, 2024, increase is reversed. The DOL may seek to appeal the Court’s decision to the Fifth Circuit Court of Appeals. However, due to the change in administration coming in January 2025, any appeal by the DOL will likely be abandoned and the Texas’ Court’s decision will stand.
If you have questions regarding this ruling, please contact Dani Smid or your BrownWinick attorney.