November 18, 2024
On November 15, a federal judge in the Eastern District Court of Texas struck down all components of the Biden administration’s Fair Labor Standards Act (FLSA) overtime final rule which, among other things, increased the salary threshold to $58,565, beginning January 1, 2025. Both the July and January salary thresholds are now no longer in effect. The decision applies to all covered employers and employees under the FLSA nationwide.
By way of background, the final rule implemented a two-phase approach to increasing the minimum salary threshold under the FLSA overtime regulations. The first increase took effect on July 1, increasing the minimum salary threshold from the current level of $684 per week ($35,568 per year) to $844 per week ($43,888 per year). The second increase was set to take effect on January 1, 2025, and it would have increased the minimum salary threshold again to $1,128 per week ($58,656 per year).
The salary threshold set in the 2019 regulations ($35,568 per year or $683 per week) is now essentially reinstated as the minimum salary threshold employers must adhere to. Although President-elect Trump may decide to increase the minimum salary threshold during his second term, there will almost certainly be no effort from his incoming administration to appeal the decision in favor of the Biden administration’s threshold.
If you have any questions about this or any other employment law matter, please contact Dean Leazenby at (574) 294-7491 or [email protected].