On February 28, 2025, the US Department of Labor (DOL) appealed a December 2024 Texas federal trial court’s decision that blocked a Biden-era overtime rule promulgated by the DOL. This is the DOL’s second appeal following an appeal in November by the then Biden-led DOL of another Texas district court’s ruling that similarly vacated and set aside the overtime rule nationwide. Both cases were appealed to the Fifth Circuit Court of Appeals.

The DOL’s revised overtime rule went into effect in July 2024 and expanded overtime eligibility for employees by raising the salary threshold required for an employee to qualify for an overtime exemption under the Fair Labor Standards Act (FLSA). To be exempt from overtime requirements under the FLSA (time-and-one-half the regular rate of pay for hours worked in excess of 40 hours in a work week), employees must primarily perform certain job duties, be paid on a salary, not hourly, basis, and earn at least a minimum threshold salary.

Under the DOL’s 2024 rule, the annual salary threshold initially increased from $35,568 to $43,888 on July 1, 2024, and was set to increase again on January 1, 2025 to $58,656 prior to the decision by the US District Court for the Eastern District of Texas to vacate the rule in November. The rule also provided for a mechanism to increase the threshold level every three years, beginning on July 1, 2027. In November, District Court Judge Sean D. Jordan granted summary judgment, thereby blocking the rule nationwide, stating that the DOL’s “changes to the minimum salary level in the 2024 Rule exceed its statutory jurisdiction.” By setting the minimum salary threshold so high, Judge Jordan wrote, the 2024 rule “effectively eliminates” the other considerations required under the FLSA, like job duties, “in favor of what amounts to a salary-only test.”

The decision by the Trump Administration to appeal the most recent District Court decision came as a surprise to some, as it is believed by many that the Trump Administration will look to review the 2024 overtime rule and possibly get rid of it all together. However, the decision by the Trump Administration to appeal allows the DOL to defend its longstanding practice to set a salary threshold for overtime eligibility, although it appears likely the Trump DOL would set the threshold minimum much lower—closer to the $35,500 threshold minimum set by the DOL during the first Trump Administration.

We expect and will continue to monitor changes to the overtime rule as it moves through the courts under the new Trump Administration.