Judge Vacates DOL Overtime Rule That Went into Effect in July

Missy Oakley & Nicole Elgin
Barran Leibman LLP,

Earlier this year, the U.S. Department of Labor (“DOL”) announced the Final Rule: Restoring and Extending Overtime Protections (“Final Rule”). The Final Rule increased the salary threshold for the bona fide executive, administrative, and professional exemptions (“white-collar exemptions”) and the total annual compensation threshold for the highly compensated employee (“HCE”) exemption. We outlined the requirements of the Final Rule in a prior E-Alert, which you can find here.

The first set of salary increases went into effect on July 1, 2024, and the next set were scheduled to go into effect on January 1, 2025. However, on Friday, November 15, 2024, a federal judge in Texas vacated the Final Rule, finding that it exceeded the DOL’s authority. The judge’s decision blocks application of the Final Rule nationwide.

It is unclear whether the DOL will appeal the court’s ruling. Employers can anticipate other changes from federal employment agencies with the incoming change in administration. We will continue to monitor developments related to the Final Rule; however, for now, employers are relieved of its requirements. This means that the salary threshold for the white-collar exemptions is back to $684 per week ($35,568 per year), and the total annual compensation threshold for the HCE exemption is back to $107,432.

For questions about wage and hour requirements, contact Missy Oakley at 503-276-2122 or [email protected], or Nicole Elgin at 503-276-2109 or [email protected].

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