On November 15, 2024, U.S. District Judge Sean Jordan of the Eastern District of Texas vacated the Department of Labor’s 2024 rule that had increased the minimum salary thresholds for the Fair Labor Standards Act’s (FLSA) white-collar overtime exemptions. This decision reverted the salary thresholds back to their 2019 levels.
This means the minimum salary required to be eligible for the EAP exemptions returned to $684 per week ($35,568 annually).
However, because the courts’ ruling came months after the July 1, 2024 increase became effective (to $844 per week) many employers have already implemented salary increases to employees who were making less than this amount to maintain their overtime exemption.
Companies are now faced with a choice – leave these employees as nonexempt or return them to exempt status based on the previous salary basis test.
At HR Consulting Solutions, we understand compliance with wage and hour laws is critical to protecting your business and employees. This ruling highlights the need for employers to stay vigilant and proactive in addressing employee classification and compensation practices. Misclassifications can lead to costly penalties and employee disputes.
How We Can Help:
- Conducting wage and hour audits to ensure compliance.
- Providing guidance on properly classifying employees as exempt or non-exempt.
- Offering strategic advice on adapting to the shifting legal landscape.
Our team is here to assist your organization in navigating these complex changes. Let us work together to mitigate risks and safeguard your business. Contact us today to learn more!