On Nov. 15, 2024, the United States District Court for the Eastern District of Texas blocked the latest effort by the U.S. Department of Labor (DOL) to increase the minimum salary executive, administrative, and professional employees must receive before they can be properly classified as exempt from overtime under the Fair Labor Standards Act (FLSA). In a 62-page decision, Judge Sean D. Jordan explained that the 2024 rule “plainly exceeds” the DOL’s authority because it increases the salary‑level test to an extent that would effectively displace the job-duties test required by the FLSA’s text. Notably, Judge Jordan’s decision prevents the DOL from enforcing the 2024 rule anywhere in the country.

Part of the 2024 rule went into effect on July 1, 2024, when the salary-level test increased to $844 per week. The salary-level test was scheduled to increase again to $1,128 per week on Jan. 1, 2025, with further increases to follow automatically. As a result of Judge Jordan’s decision, however, the salary-level test reverts to just $684 per week ($35,568 annually). Employers will still need to show that employees’ job duties primarily involve executive, administrative, or professional duties for the overtime exemption to apply, however.

The DOL could choose to appeal Judge Jordan’s decision to the U.S. Court of Appeals for the Fifth Circuit, but it would be well into 2025 before any such appeal would be decided. It is also possible that the incoming Trump administration could reverse or substantially revise the 2024 rule. Taft’s Employment and Labor Relations practice group will provide updates regarding this rule.

The case is Texas v. Department of Labor, No. 4:24-cv-499-SDJ (E.D. Tex.).