Texas Court Hits Pause on DOL Minimum Salary Level Increases for White-Collar Exemptions

The U.S. District Court for the Eastern District of Texas announced on November 15, 2024 that it would block the U.S. Department of Labor (DOL)’s final regulation increasing the salary threshold for the so-called “white-collar” overtime exemption under the Fair Labor Standards Act (FLSA) on a nationwide basis.

The court struck down both the standard salary level increase that was set to go into effect on January 1, 2025, as well as the previous standard salary level increase that went into effect on July 1, 2024. As a result, all employers with employees otherwise qualified for an executive, administrative, or provisional exemption (the white-collar exemptions) will not be required to increase the standard salary level on January 1, 2025, and further will not be required to maintain any salary increase made in compliance with the July 1, 2024 standard salary level increase, as discussed in our previous post – “DOL Increases Minimum Salary Level for White-Collar Exemptions”.

Prior to November 15, 2024, the court had previously prevented the rule from going into effect relative to State of Texas employees. However, the court’s ruling now expands the breadth to all employers on a nationwide basis. The court criticized the standard salary level increases as transforming what is supposed to be a multi-prong analysis focused on both salary and performing certain qualifying duties to one focused strictly on earning a certain salary level.

In addition to striking down the two scheduled standard salary level increases, the court further found unlawful the DOL’s automatic increase provision, which would have routinely increased the standard salary level every three years.

Employers that have completed or nearly completed their plan for increasing standard salary levels in anticipation of January 1, 2025 can now safely put such efforts on pause. The analysis is more nuanced for those employers who have already increased the standard salary level to comply with the July 1, 2024 standard salary level increase. Accordingly, employers questioning whether further adjustment is appropriate in light of this decision should discuss with a member of the employment team at Conway, Olejniczak & Jerry S.C.

Written By:
Attorney Shane A. Anderson