The U.S. District Court for the Eastern District of Texas has issued a ruling invalidating the entirety of DOL’s overtime final rule. In his ruling, Judge Jordan stated that while DOL has the authority to define and delimit the terms of the overtime exemption, “that authority ‘is not unbounded.'” He explained, “the minimum salary level imposed by the 2024 Rule ‘effectively eliminates’ consideration of whether an employee performs ‘bona fide executive, administrative, or professional capacity’ duties in favor of what amounts to a salary-only test.” He also said that the Department’s automatic updates to the minimum salary threshold every three years “violates the notice-and-comment rulemaking requirements of the [Administrative Procedure Act].” In light of this decision, the minimum salary threshold is once again set to $35,568, and the threshold for highly compensated employees is set to $107,432.
The Department of Labor may appeal the decision to the 5th Circuit, but once the Trump Administration takes office, it will likely abandon defense of the rule.
