DOL Rule Raising Salary Threshold for Exempt Employees Partially Blocked in Texas; Takes Effect Nationwide on July 1

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On Friday, a federal judge in Texas ruled that the U.S. Department of Labor (DOL) likely exceeded its authority in implementing its Final Rule, which raises the minimum salary threshold to qualify an employee as exempt from the overtime requirements of the Fair Labor Standards Act (FLSA). This decision currently applies only to employees working for the State of Texas, as the court declined to issue a nationwide injunction.

As a result, the injunction affects only state employees in Texas. For all other FLSA-covered employers, the rule will take effect as scheduled on Monday, July 1. However, additional legal decisions may be forthcoming.

The salary level threshold to be an exempt executive, administrative or professional employee will increase from $35,568 to $43,888 per year (i.e. $684 to $844 per week) on July 1, 2024.  On January 1, 2025, the salary level will increase yet again to $58,656 ($1,128 per week).  Thereafter, the salary level is set to automatically increase every 3 years.  The highly compensated employee exemption salary threshold will also be increasing from the current $107,432 to $151,164 by 2025.