Texas Court Invalidates DOL Overtime Exemption Salary Threshold Rule

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On Nov. 15, a federal judge in Texas struck down the U.S. Department of Labor’s (DOL) latest attempt to raise the minimum salary thresholds for the Fair Labor Standards Act’s (FLSA) white-collar overtime exemption, finding that the rule exceeded the agency’s statutory authority.

The ruling vacates the DOL’s rule nationwide, including the increase that went into effect on July 1, 2024. As a result, the salary threshold exempt status reverts to the DOL’s 2019 rule, which sets the EAP exemption at $684 per week, or $35,568 annually, and the HCE exemption at $107,432 per year.

The DOL could appeal the decision to the Fifth Circuit, which may keep employers in limbo for some time. The Fifth Circuit is traditionally employer-friendly, so an appeal by the DOL would likely be an uphill battle. The incoming DOL under the new Trump administration may influence whether the DOL decides to appeal.

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