Taking Care of HR Business
        A blog from the attorneys of Verrill

        FLSA Salary Exemption Hike Set Aside Nationally: What to Do Now?

        by Tawny L. Alvarez on November 15, 2024

        Earlier today, November 15, 2024, United States District Court Judge Sean D. Jordan of the Eastern District of Texas, granted summary judgment against the Department of Labor determining that the United States Department of Labor regulations expanding overtime eligibility to over four million workers went beyond the agency’s authority and vacating and setting aside the rule, foreclosing it from fully taking effect on January 1, 2025.

        Background

        As many readers know, earlier this year, the Department of Labor issued updated regulations that increased the salary threshold required for certain exempt employees from $35,568 to $43,888 on July 1 and $58,656 on January 1. More information concerning the rule itself is available here.

        The Decision

        The State of Texas, the Plano Chamber of Commerce, and other businesses brought a civil action seeking to enjoin or stop enforcement of the regulation and arguing that the Department of Labor exceeded its authority in increasing the salary level given that the FLSA’s text does not specify any minimum salary for an employee to qualify for an administrative, executive, or professional exemption. In its ruling, the court noted that case law supports that the DOL has the authority to “impose a salary-level test to qualify for the exemption” but that the current rule exceeds the Department’s authority because it increases the minimum salary level for an administrative, executive, or professional exemption to a level that “effectively displaces the duties-based inquiry,” focusing only on the salary-level test.

        What Does This Mean For Employers

        Many employers may have already announced or amended salary pay requirements to meet the annual increase of $58,656. If that is the case in your organization, employers should maintain their current pay practices. If the organization decides to attempt to reduce said salary, it should review local and state laws concerning pay reductions and should also take into account morale implications that accompany any decrease in pay. If a roll-back of any prior increases is considered (and permitted under state law), such roll-back should also be done on an “across the board” basis to limit any arguments concerning discriminatory or retaliatory behavior.

        Employers who have been analyzing and discussing courses of action moving forward can pause said discussions (for now). While the DOL is likely to appeal this decision, it is doubtful that said appeal would be heard before January 1, 2025, and additionally unlikely that in 2025, President-elect Trump’s administration would support the DOL’s continued attempts at enforcement of the regulation in the new administration. This does not, however, mean that the work done in analyzing positions under the regulation is without value. In many cases, an annual review of the duties test of an employer’s exempt workforce is valuable to confirm that the individuals remain appropriately categorized as exempt.

        Employers with questions about this decision or wage and hour concerns should contact a member of Verrill’s Employment and Labor Practice Group.

        Taking Care of HR Business

        Human resource professionals, supervisors, and company executives are constantly confronted with a changing legal landscape. Verrill’s Taking Care of HR Business blog is designed to keep you informed about the latest and most significant legal developments that affect employers.

        Key Contact

        Subscribe

        Looking for more great content? Subscribe for regular legal updates and information delivered right to your inbox.

        Firm Highlights

        Blog

        Working 9 to 5? It’s a Way to Make a Livin’, so Make Sure You’re Payin’ for Every Minute: A Maine Employer’s Guide to Stacked Wage & Hour Rules

        Four decades after Dolly Parton gave us both the namesake anthem of the American workday and the film about three fed-up office workers’ dreams of...
        Alerts and Newsletters

        Can AI Pass the Doctor Test? FDA Considers Physician-Inspired Evaluation of GenAI Devices and Other Regulatory Measures

        AI is entering healthcare with indomitable will. It promises to increase efficiency, reduce administrative burden (which healthcare providers so...
        Press Releases

        Verrill Attorney Annabel Rodriguez Named Top Women of Law by Massachusetts Lawyers Weekly

        BOSTON, Massachusetts – Verrill attorney Annabel Rodriguez has been recognized as a Top Women of Law by Massachusetts Lawyers Weekly, and will be...
        Blog

        What Employee Benefits Lawyers Do (and How to Make the Best Use of Us)

        What do employee benefits lawyers do all day and how can clients make the best use of them? This post offers an overview of the kinds of things...
        Media Mentions

        Bloomberg Law Quotes Robert Keach on Expanded Access to Small Business Reorganization

        Verrill attorney Bob Keach was recently featured in Bloomberg Law, discussing legislation that would raise debt limits for bankruptcy relief and...
        Blog

        Phil Bartlett to Step Down as Chair of the Maine Public Utilities Commission

        On September 15, 2026, Governor Janet Mills announced that Phil Bartlett will step down as Chair of the Maine Public Utilities Commission (PUC)...
        Published Works

        Jay McCormack and Michael Fee Co-Author AHLA Article on Skin Substitute Enforcement Trends

        Verrill Partners Jay McCormack and Michael Fee co-authored an article for the American Health Law Association's Fraud and Abuse Practice Group...
        Press Releases

        Verrill Welcomes Health Care & Life Sciences Attorney Elpida Velmahos

        BOSTON, Massachusetts – Verrill is pleased to announce that Elpida Velmahos has joined the firm’s Health Care & Life Sciences Group as an...
        Press Releases

        Verrill Welcomes Litigation & Trial Attorney Emma Pooler

        PORTLAND, Maine – Verrill is pleased to announce that Emma Pooler has joined the firm’s Litigation & Trial Group as an Associate, resident in...
        Published Works

        Four Verrill Attorneys Co-Author Massachusetts Trends and Developments Chapter for Chambers and Partners Child Relocation 2026 Guide

        Verrill attorneys Mary H. Schmidt, Rachel A. Deering, Hannah R. Zukoff, and Mariah G. Tappan co-authored the “Trends and Developments” chapter...
        Blog

        A New Protected Class in Maine: Holders of Final Protection Orders

        In the lead-up to Domestic Violence Awareness Month in October, employers may be taking a closer look at how their policies and practices respond to...
        Alerts and Newsletters

        Verrill Secures SJC Victory for Boston Legacy FC in White Stadium Litigation

        Verrill has secured a significant appellate victory for Boston Legacy FC in the litigation challenging the redevelopment of White Stadium in...