A Texas federal judge has blocked a key U.S. Department of Labor (DOL) rule that would have expanded overtime eligibility to millions of workers. The court’s decision as of Friday November 15, 2024 halts the implementation of this rule nationwide.
Judge Sean D. Jordan of the U.S. District Court for the Eastern District of Texas ruled that the DOL exceeded its statutory authority with the 2024 rule, which would have raised the salary threshold from $35,568 to $43,888 effective July 1, 2024 and to $58,656 effective January 1, 2025. The rule also included automatic triennial updates to the threshold. This increase could have made approximately 4 million workers eligible for overtime pay.
The case, State of Texas v. DOL, E.D. Tex. No. 4:24-CV-499, underscores the ongoing tension between federal labor initiatives and state and business interests, raising important questions about the scope of the DOL’s authority under the Fair Labor Standards Act.
What does this mean for employers? Employers do not need to adjust salaries or reclassify employees to comply with this now-invalid rule. The current overtime threshold remains at $35,568 (for now). The court has ruled both the July 2024 and the anticipated January 1, 2025 increases exceed the DOL’s authority under the FLSA and has invalidated them both.
This ruling is likely to be appealed, which could result in future changes.
