Federal Court in Texas Sets Aside Overtime Rule

On Nov. 15, the U.S. District Court for the Eastern District of Texas set aside the U.S. Department of Labor’s (DOL’s) rule Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees (2024 Overtime Rule). The final rule, which was published April 26, would have increased the overtime salary threshold for millions of workers. Following the rule’s publication, states and trade groups challenged it, arguing that the DOL overstepped its authority with a significant increase and automatic adjustments.

The district court agreed with the plaintiffs’ arguments and held that the DOL had exceeded its authority with the 2024 Overtime Rule. Much of the court’s legal reasoning mirrored its 2017 judgment in which it permanently blocked an earlier attempt to raise the overtime threshold under the Obama administration. In the Nov. 15 decision, the court found that such a sharp increase would make employees’ duties irrelevant if their salary fell below the new level.

Since the court vacated, or set aside, the 2024 Overtime Rule nationwide, the overtime salary thresholds are set at the 2020 levels of $684 per week or $35,568 annually. Additionally, the salary level for highly compensated employees has returned to $107,432 annually.