The Fair Labor Standards Act requires employers to pay employees a minimum wage and, for those working more than forty (40) hours a week, overtime pay at 1.5 times their regular rate. However, employees in a bona fide executive, administrative, or professional capacity (EAP) are exempt.
To qualify for this exemption, employees must be compensated on a salary or fee basis, perform office or non-manual work directly related to management or general business operations, and meet other criteria.
On April 23, 2024, the Department of Labor (DOL) announced a new Overtime Rule, raising the salary threshold for EAP employees from $43,888 to $58,656 annually. The highly compensated employee (HCE) exemption threshold was also set to increase from $132,964 to $151,164, effective July 1, 2024.
However, in November 2024, a Texas District Court struck down the DOL’s final rule, ruling that the salary threshold increases exceeded the DOL’s authority. This decision blocked the July 1, 2024, and January 1, 2025, salary increases nationwide.
What This Means for Employers: Employers are not required to increase salaries on January 1, 2025. If you need help navigating this complex rule or any other employment issue, contact Leslie Even at Turke & Steil, LLP.