A federal judge in Texas has struck down the Biden administration’s 2024 Fair Labor Standards Act (FLSA) overtime rule nationwide. The rule, which aimed to raise the salary threshold for overtime eligibility, was deemed to exceed the Department of Labor’s statutory authority. Key details include:
The 2024 Rule Details:
- It proposed a two-phase increase to the minimum salary threshold for overtime exemption:
- Phase 1: Raised the threshold to $43,888 annually ($844 weekly) on July 1, 2024.
- Phase 2: Planned to increase it further to $58,656 annually ($1,128 weekly) on January 1, 2025.
- Included automatic updates every three years.
Court’s Findings:
- The court ruled the rule improperly prioritized salary thresholds over job duties in determining overtime eligibility.
- The decision builds on a June ruling that blocked the rule’s first phase for public employers in Texas, now extended nationwide.
Current Threshold:
- The salary threshold remains at the level set in 2019: $35,568 annually ($683 weekly).
Implications for Employers:
- Employers may delay or reconsider the second salary increase scheduled for January 2025.
- Rescinding the July 2024 increase is technically possible but may harm employee relations.
- Employers in states with higher salary thresholds must still comply with local laws.
The ruling leaves open questions about future adjustments to overtime regulations, particularly under a potential Trump administration.