Texas judge blocks new OT rules
While writing a news report on the Department of Labor’s new overtime rules, we saw the Nov. 15 ruling by the U.S. District Court for the Eastern District of Texas blocking implementation of the new rule. The National Federation of Independent Business (NFIB) filed a lawsuit challenging the Department of Labor’s (DOL) overtime rule that would have increased the minimum salary threshold for exempt employees. NFIB joined with numerous other organizations in filing the lawsuit.
What would the new OT rule have done?
Under the new rules, the minimum salary an employee must earn to be classified as “exempt” from overtime pay would have increased to $58,656 annually ($1,128 per week). This means that an employee who earned less than $58K annually would have been entitled to overtime pay for any hours worked over 40 in a workweek. Previously, workers earning below the old threshold ($35,568) were already eligible for overtime.
The U.S. Department of Labor (DOL) announced an update to the Fair Labor Standards Act overtime rule on April 23, 2024. Under that new overtime rule, salary threshold increased to $43,888 on July 1, 2024. On Jan. 1, 2025, it would have increased to $58,656. The new rule also included automatic increases to the overtime threshold every three years.
OT rule thrown out
The NFIB reports that, with this decision, the minimum salary threshold is again set to $35,568, and the threshold for highly compensated employees is back to $107,432. The Court determined that the rule, which went into effect in July of this year, exceeded the DOL’s statutory authority, striking down each part of the rule to vacate it nationwide.
“On behalf of the thousands of small businesses who have been adversely impacted by the 2024 overtime rule, NFIB is grateful to the Court for putting an end to this onerous regulation. This rule overcomplicated the process for determining EAP exemptions, and exponentially increased labor costs for thousands of small businesses. Today’s decision will provide substantial relief for Main Street firms,” said Beth Milito, executive director of the NFIB Small Business Legal Center.
