Overtime Rule Update – The Good News And The Bad, Bad News
July 1, 2024
On June 28, 2024, a federal trial court ruled in a lawsuit filed by the State of Texas against the Department of Labor (DOL) that the new overtime rule which significantly raises the salary threshold for the executive, administrative and professional employees (“white-collar”) overtime exemption is likely unlawful. The court granted Texas’ request for a temporary order prohibiting the DOL from implementing and enforcing the new overtime rule on July 1. That is the good news.
The bad news is that this order does not apply nationwide. It only applies to the State of Texas as an employer. As such, the July 1 increase to the white-collar overtime exemption’s salary threshold went into effect for all other employers today. There is more bad news. Today, a different court in the Northern District of Texas denied another employer’s request for an order prohibiting the DOL from implementing the overtime rule on July 1. This decision was based upon the facts specific to this employer.
The challenges to the rule are not over. The State of Texas lawsuit has been consolidated with the second case filed in the Eastern District of Texas and will continue; the court will eventually address the plaintiffs’ requests for a permanent injunction against the overtime rule. And the case in the Northern District of Texas will continue to consider whether an injunction should be issued before the next increase to the salary threshold on January 1, 2025.
We are closely following these cases and will keep you posted on developments. If you have questions, please contact a KZA attorney.
KZA Employer Report articles are for general information only; they are not intended and should not be construed to be legal advice. Reading or replying to such articles does not establish an attorney-client relationship. In addition, because the subject matters and applicable laws discussed in Employer Report articles are often in a state of change and not always applicable to every type of business entity or organization, readers should consult with counsel before making decisions based on the same.