New FLSA Salary Threshold Blocked by Court
As employees and employers alike in South Florida should know, the US Department of Labor (DOL) published a final rule in April 2024 that would raise the salary threshold for exempt employees. There are three elements, or parts of a test, that must be met for an employee to be considered “exempt,” which then means that the employee is not entitled to overtime wages. In order to be “exempt,” an employee must be paid on a salary basis, must earn above a salary threshold, and must have duties associated with an exempt profession (i.e., executive, administrative, professional, outside sales, and computer employees).
The earnings threshold had not been raised in quite some time, and without the DOL’s final rule, many salaried employees earning around the equivalent of minimum wage in some states were still being classified as “exempt.” However, a Texas court has now blocked the rule from taking effect, and the earnings threshold has reverted to the amount it was prior to the publication of the DOL’s final rule in April 2024. Our Palm Beach Gardens wage and hour lawyers can tell you more.
What the Published Final Rule Would Have Changed
When the DOL published its final rule in April, the following was set to take place concerning the earnings threshold for determining exempt employees:
- Beginning July 1, 2024, minimum salary would become $844 per week or $43,888 annually;
- Beginning January 1, 2025, minimum salary would become $1,128 per week or $58,656 annually; and
- Total compensation requirement for “Highly Compensated Employees,” or HCEs, would rise once on July 1, 2024, and again on January 1, 2025.
Part of the final rule did take effect in July of 2024, but a November 15 ruling from the US District Court for the Eastern District of Texas vacated the final rule.
What the Texas Court Decision Means
Part of the final rule took effect for employers outside Texas on July 1, 2024, but now, for all employers across the country, the salary threshold has reverted to $684 per week, or $35,568 annually. Employees who received overtime wages after July 1, 2024 as a result of the final rule are entitled to that pay, but their employees are no longer required to consider those employees non-exempt if the salary threshold was the only element that resulted in non-exempt classification.
The DOL can appeal the ruling, but the ultimate outcome may rest with the incoming president.
Contact a Palm Beach Gardens Wage and Hour Lawyer
It is essential to know your rights under state and federal law, and to ensure that you are being paid fairly. Whether you may have been improperly classified as an “exempt” employee, or your employer otherwise has failed to properly pay you for overtime hours you worked, it is critical to seek legal advice. One of the experienced Palm Beach Gardens wage and hour attorneys at Sconzo Law Office can speak with you today to understand your case and to tell you about your options for filing a wage and hour claim. Contact us today to get started.
Sources:
dol.gov/agencies/whd/overtime/salary-levels
law.justia.com/cases/federal/district-courts/texas/txedce/4:2024cv00499/230562/76/
