DOL’s 2024 FLSA Salary Level Rule Vacated Nationwide
| On Friday, November 15, 2024, the United States District Court for the Eastern District of Texas vacated the United States Department of Labor’s April 23, 2024, final rule changing the standard salary level threshold required in order for otherwise exempt executive, administrative, and professional employees to continue to remain exempt from the Fair Labor Standards Act’s (FLSA) minimum wage and overtime pay requirements. The court ruled that the DOL exceeded its authority granted by Congress in promulgating the rule because the rule’s sharp increase in the salary level effectively supplanted the job duties tests. Therefore, the court vacated the entire rule on a nationwide basis. The provisions of the April 23, 2024, rule were as follows. July 1, 2024 Effective Date The “standard salary level” is raised from the currently enforced level of $684/week (which has been in place since 2019) to $844/week, which is equivalent to $43,888/year.The total compensation level for “highly compensated employees (HCEs)” is raised from the currently enforced level of $107,432/year to $132,964/year, including at least $844 per week paid on a salary or fee basis. January 1, 2025 Effective Date The “standard salary level” is raised to $1,128/week, which is equivalent to $58,656/year.The total compensation level for HCEs is raised to $151,164/year, including at least $1,128 per week paid on a salary or fee basis. July 1, 2027 and Every 3 Years Thereafter Increases in the “standard salary level” and the total compensation level for HCEs will be adjusted to reflect current earnings data. As noted, this entire rule has now been vacated. Therefore, the 2019 rule that went into effect on January 1, 2020, is still in effect, meaning that the following salary levels still apply. The “standard salary level” is back down to $684/week (which is equivalent to$35,568/year).The total compensation level for “highly compensated employees (HCEs)” is back down to $107,432/year, including at least $684 per week paid on a salary or fee basis. At this point, the DOL could appeal this decision to the United States Court of Appeals for the Fifth Circuit. However, even if it does, it is doubtful that briefing, oral argument, and a decision would be issued prior to President-Elect Trump taking office in January 2025. And when Trump took office the first time in January 2017, he was faced with the exact same situation where a United States district court had vacated the Obama administration’s 2016 FLSA salary level rule. And the Trump DOL abandoned the Obama DOL’s appeal in that case, effectively killing the 2016 rule for good. If past is prologue, that may be what happens here, meaning that the 2024 Biden administration salary level rule is probably dead. |