A federal court has stayed proceedings in litigation over the 2024 overtime rule while the U.S. Department of Labor (DOL) reconsiders the regulations. The department asked the 5th U.S. Circuit Court of Appeals for the stay in the case it appealed in February. The court agreed on April 29 and required the agency to file a status report with the court every 60 days.
“While there is speculation that the DOL might withdraw the appeal and issue its own overtime rule, it remains to be seen how the DOL will proceed,” said Natalie Bare, an attorney with Duane Morris in Philadelphia. “There are several potential approaches the DOL could take. Employers may not be able to safely exit the overtime rule roller coaster quite yet.”
Given the continued uncertainty, employers that implemented changes to employees’ salary levels or exempt statuses in response to the July 2024 increase to the standard salary threshold for white-collar overtime exemptions should seek the assistance of counsel if they are considering reverting to the salary levels and exempt statuses they used before the first increase under the 2024 rule, Bare said.
2024 Rule
The 2024 rule implemented two increases to the standard salary threshold, and the U.S. District Court for the Eastern District of Texas invalidated both.
The first increase, which went into effect July 1, 2024 — and which many employers had implemented by the time it was invalidated in November 2024 — raised the standard salary level from $684 per week to $844 per week. That number was calculated using the 20th percentile of weekly earnings of full-time salaried workers in the lowest-wage Census region (the South).
“This is the same methodology that was used for the 2019 overtime rule, which was issued by the DOL under the [first] Trump administration, and which went into effect on Jan. 1, 2020, bringing the standard salary level to its current level of $684 per week,” Bare said.
The second increase of the 2024 rule, which would have gone into effect on Jan. 1, 2025, would have raised workers’ standard salary level to the 35th percentile weekly earnings of full-time salaried workers in the lowest-wage Census region — from $844 per week to $1,128 per week.
“It is highly unlikely that the DOL under the [second] Trump administration would maintain the appeal as to the second increase,” Bare said. This increase represents “a significant departure from the methodology it supported during the first Trump administration.”
However, the DOL may maintain its appeal of the first increase of the 2024 rule, Bare said.
Appeals by Biden and Trump Administrations
After the U.S. District Court for the Eastern District of Texas invalidated both parts of the 2024 overtime rule on Nov. 15, 2024, the Biden administration appealed.
There was a second case challenging the overtime rule, and a judge granted summary judgment to the plaintiff in that case in December 2024.
“In a surprise to many, the DOL appealed that decision too, in February 2025, after President [Donald] Trump took office,” said Keith Kopplin, an attorney with Ogletree Deakins in Milwaukee. “Many assumed that the Trump administration would abandon defense of the Biden DOL’s overtime rule.”
However, based on the DOL’s recent request for a stay on the case while it reconsiders the rule, “it seems unlikely that the 5th Circuit will be called upon to render a decision regarding the pending appeals,” Kopplin added.
If the 5th Circuit renders a decision in either case, he predicted it would likely affirm invalidation of the rule. But if the 5th Circuit instead were to vacate the lower court decisions in whole or in part, those portions of the overtime rule would become valid and enforceable. That could mean an overtime case might be appealed to the U.S. Supreme Court.
The 5th Circuit already rejected another case challenging the overtime rule from the first Trump administration, specifically the DOL’s power to set an overtime salary threshold at all. The plaintiff has pledged to seek an appeal in that case to the Supreme Court.
New Overtime Rule on the Horizon?
“Although it is not necessarily a priority, it is possible that the Trump DOL will eventually issue its own overtime rule” during its second term, Kopplin said.
Such a rule might adopt the same methodology the DOL used in its overtime rule during Trump’s first term. “That would increase the threshold to roughly $844 — the same threshold as the 2024 overtime rule’s July 1, 2024, increase,” Kopplin said. “A new overtime rule from the Trump DOL would also likely be stripped of any automatic adjustment mechanism.”
However, in his opinion, while there have been some surprises along the way, “it appears that the 2024 overtime rule will ultimately be abandoned by the Trump DOL.”
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