A federal court in Texas issued a nationwide injunction setting aside a Department of Labor regulation increasing salary thresholds for the white collar exemption and highly compensated employees set to go into effect on January 1, 2025. The salary thresholds had increased on July 1, 2024 and were set to increase again on January 1, 2025 with automatic increases every three years.
The white collar exemption for executive, administrative, and professional employees requires employees to be paid on a salary basis and meet a duties test and salary threshold to be exempt from minimum wage and overtime pay under the Fair Labor Standards Act. The salary threshold for the white collar exemption had increased from $35,568 ($684/week) on July 1, 2024 to $43,888 ($844/week). With the injunction, the salary threshold reverts back to $35,568 for all employers nationwide.
The highly compensated employee exemption was increased from $107,432 to $132,964 on July 1, 2024 and was set to increase to $151,164 on January 1, 2025 and then automatically every three years. With the injunction, the salary threshold reverts back to $107,432 for all employers nationwide.
This injunction may change employer’s plans for year-end salary increases. Please reach out to Gutwein Law for assistance in evaluating exemptions and before decreasing salaries due to this injunction.
