Federal Judge Strikes Down New Overtime Rules
From the National Council of Nonprofits (link):
On November 15, a federal district judge in Texas invalidated the Labor Department’s overtime rule that sought to raise the minimum salary level that white collar employees must be paid to remain exempt from overtime pay. The ruling applies both to the higher salary level test that went into effect this past July 1 and blocks the next change set for January 1, 2025, essentially returning the pay requirements to the 2019 level of $35,568 per year ($684 per week). The decision also invalidates the automatic increases scheduled to take effect in the future.
In striking down the rule, the judge found that the Labor Department’s “2024 Rule plainly exceeds its authority under the [Fair Labor Standards Act].” The judge essentially relied on the same basis as a different Texas federal judge who invalidated the Obama Era overtime rule in 2016. In both cases, the judges found that the high salary level test imposed by the rule effectively rendered moot the job duties tests that are the basis of the overtime exemption for executive, management, and administrative employees. While the U.S. Department of Labor can appeal the decision, it is likely that the incoming Trump Administration will do what it did back in 2017 – withdraw the appeal and allow the new decision to be the final word on the issue. The Trump DOL could start rulemaking to revise the overtime rule again, but that’s not an early priority.
Read More:
- Ruling: Memorandum Opinion and Order, State of Texas v. DOL, E.D. Tex., No. 24-00499, Nov. 15, 2024.
- Texas Judge Tosses Biden Overtime Expansion for Millions, Rebecca Rainey, Bloomberg Law, Nov. 15, 2024.
- Texas Court Strikes Down Federal Overtime Rule (Again), Allan S. Bloom and P. Kramer Rice, National Review, Nov. 17, 2024.