Client Alert: Court Enjoins Exempt Salary Increase

Effective July 1, 2024, the federal minimum annual salary for employees who are exempt from overtime increased to $43,888 and it was scheduled to increase to $58,656 on January 1, 2025, per the federal Department of Labor’s final rule.?

A federal court in Texas recently enjoined the DOL’s final rule. As a result, the proposed increase in salary threshold for exempt employees under the Fair Labor Standards Act will not go into effect on January 1, 2025. This decision also enjoins the increase that occurred in July 2024 and reverts the salary threshold back to the lower salary level of $35,568. This applies to employees in all states, unless the state has enacted a higher minimum salary requirement (many states, such as New York and California, have higher requirements).?Please note this ruling may change in the future - we will keep you updated on any relevant legal developments.?

Action item: Employers should review the annual salaries of all employees classified as exempt from overtime and determine if any employees’ salaries were increased to the new minimum requirement to see if any changes need to be made.

Please reach out to?[email protected]?with any questions or if you would like support on this or other employment related matters.