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On Nov. 26, 2024, the DOL filed a notice of appeal following the Eastern District Court of Texas’ decision to vacate the department’s final rule Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees (2024 Rule) that had significantly increased minimum salary thresholds for overtime exemptions. The appeal responds to Judge Sean Jordan’s Nov. 15, 2024, Memorandum Opinion and Order in State of Texas, et al. v. DOL, et al., Case No. 24-0049 (E.D. Tex.), which expressly stated: “The 2024 Rule is hereby SET ASIDE and VACATED” (EDTX Ruling).
The EDTX Ruling nullifies both the July 2024 salary level increase and the scheduled Jan. 1, 2025, increase under the 2024 Rule. This development may create compliance challenges for employers nationwide and marks the third time in less than 10 years that courts have challenged DOL attempts to increase the salary threshold for executive, administrative, professional (EAP) and highly compensated employee (HCE) exemptions under the Fair Labor Standard Act (FLSA). To understand the nationwide impact of the EDTX Ruling and determine next steps, a brief review of the applicable law and the DOL’s previous attempts to increase the salary threshold may be instructive.
