On June 28, 2024, the U.S. District Court for the Eastern District of Texas issued an injunction blocking the U.S. Department of Labor’s new EAP overtime rule which was set to go into effect July 1, 2024. Unfortunately, the holding only applies to the state of Texas as an employer.
As reported in our prior Client Alert, the new Department of Labor (DOL) rule raises the salary threshold for individuals to qualify for the executive, administrative, or professional (EAP) exemption from overtime pay. Previously, the salary threshold was $35,500 in a year. The new rule raises the salary threshold to $43,888 on July 1, 2024, with a subsequent increase to $58,656 on January 1, 2025. The State of Texas filed a lawsuit to block this new rule from going into effect.
Although the plaintiff in this case was the State of Texas, the lawsuit sought a nationwide injunction barring the rule from going into effect for any employer in the United States. However, the Texas court limited its ruling to the State of Texas as an employer. All other employers will still have to comply with the new salary requirements of the rule, which went into effect on July 1, 2024.
This lawsuit was one of several legal challenges to the DOL rule. On May 22, a coalition of business groups sued in the same district court (Plano Chamber of Commerce v. DOL). However, those plaintiffs did not seek a preliminary injunction barring the new rule from going into effect on July 1, 2024. Nevertheless, the lawsuit challenges the DOL’s ability to set the salary threshold levels as was done in the new rule. On June 28, 2024, the Plano case was consolidated with the State of Texas case. We will have to wait for a decision on the merits, which is likely to have nationwide impact, but will not be decided for several months.
A similar lawsuit was filed in the Northern District of Texas – Flint Avenue, LLC v. DOL. On July 1, 2024, Judge Sam R. Cummings denied the plaintiff’s request for an injunction and motion for stay.
For now, all employers must comply with the new DOL rule that went into effect on July 1, 2024. However, more decisions are expected in the near future. Stay tuned to Buelow Vetter’s legal updates for the latest news.
If you have any questions about this Legal Update, please contact:
Attorney Joel S. Aziere, 262-853-0600, jaziere@buelowvetter.com
Attorney Benjamin B. Bauman, 262-364-0264, bbauman@buelowvetter.com
or your Buelow Vetter attorney
