As we previously reported, the first phase of the Department of Labor’s new overtime rule kicked in on July 1, 2024. The new rule increases the minimum salary threshold for workers classified as exempt under the Executive, Administrative, and Professional (“EAP”) exemptions in two phases from the current $35,568 per year ($684 per week) to:
- $43,888 annually ($844 per week) on July 1, 2024; and
- $58,656 annually ($1,128 per week) on January 1, 2025.
Last week, a judge in Texas temporarily blocked the rule when it granted a request for an injunction filed by the State of Texas. However, the injunction is limited to the State of Texas in its capacity as an employer of state employees. Private employers in Texas and all businesses in the rest of the country are not affected by the injunction.
So, does this ruling have any substance? Certainly, businesses and employees outside the Lone Star State are not impacted. As for those in Texas, one report suggests that state of Texas has less than 100 employees that would be impacted by the July 1 minimum salary increase. So, for now, this injunction is extremely limited in nature. But, the battle over the legality of the DOL overtime rule will go on. There are several other lawsuits pending in Texas and elsewhere related to the new overtime rule, and it remains to be seen whether those courts will issue broader injunctions. Back in 2016, a federal court blocked a similar minimum salary increase nationwide. Will this happen again? Time will tell. We will keep readers apprised of any developments through updates to The Law @ Work.