A new salary threshold for overtime eligibility that was set to impact millions of U.S. workers and businesses will not go into effect on January 1, 2025.
The U.S. Department of Labor’s Final Rule, which aimed to implement a second increase in overtime pay requirements under the Fair Labor Standards Act (FSLA), was overturned in a Texas federal court on Friday, November 15, 2024.
What Does This Mean for Employers?
- No Immediate Salary Adjustments: Employers are no longer required to implement the January 2025 increase.
- Previous Increases Rescinded: The July 1, 2024, salary increase to $44,000 annually is also nullified, reverting the threshold back to $35,500 per year for overtime eligibility.
- Future Adjustments Halted: Automatic salary threshold updates set to begin in July 2027 are no longer enforceable.
What’s Next?
The overtime threshold will remain at $35,500 annually unless new regulations are introduced. Employers should continue monitoring developments and ensure compliance with applicable wage and hour laws.
What Should Employers Do Now?
If you already made changes to employee exemption statuses or adjusted salaries due to the July 2024 rule, consult with your HR advisor or employment attorney to determine the best course of action.