Federal Court Vacates Overtime Rule: What Employers Need to Know

ARTICLE | January 06, 2025

Authored by Vasquez + Company

A recent decision by the U.S. District Court for the Eastern District of Texas vacated the U.S. Department of Labor's expanded overtime rule that would have increased the salary threshold for exempt workers, potentially making 4 million more workers eligible for overtime pay. Although the DOL filed a notice of appeal, the new rule is unlikely to be reinstated, especially with the upcoming Trump administration. Employers who have already adjusted to the expected changes may need to reconsider their decisions, taking into account the potential impact on employee morale and state laws. This article explains the ruling, options for employers, and next steps to navigate the situation.

Key Points:

• Expanded Overtime Rule: The final rule would have increased the salary threshold for exempt workers, including highly compensated employees (HCEs).
• Court's Decision: The court ruled that the DOL overstepped its authority by prioritizing salary thresholds over job duties.
• Options for Employers: Employers who have already made changes may need to weigh whether to reverse those adjustments or stay the course.

For more information, read the full article here.

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