On Friday, November 15, 2024, the United States District Court for the Eastern District of Texas issued a final injunction against the implementation of the Department of Labor’s Fair Labor Standards Act (FLSA) rule changes. The final injunction was applied on a national level, as opposed to the preliminary injunction, which applied only in Texas.
The Court’s injunction halts the DOL rule, including the increase of the salary basis threshold to $58,656.00, which was set to take effect on January 1, 2025. Further, the injunction invalidates the prior salary basis threshold increase that occurred on July 1, 2024, returning the threshold to the previously established $35,568.00.
While it is probable that President Biden’s Department of Labor will appeal the decision to the Fifth Circuit, seeking reversal of the decision, unless such an appeal is finalized before the new administration takes over on January 20, 2025, the Trump administration is unlikely to persist in challenging the injunction.
In the meantime, many of our clients have already made decisions about how to implement the new regulations in light of the proposed salary threshold increase of more than twenty thousand dollars. In some instances, employees have been reclassified as non-exempt because they would no longer meet the salary basis to qualify as exempt. In other instances, significant salary increases are planned or have already been implemented.
At this time, with the fate of the salary threshold increases uncertain, there is good reason for employers to pause before implementing any further changes. For changes that have already been implemented, employers are in a more difficult position and thus may want to seek counsel before revisiting changes that have already been made. It is expected that the final outcome of this issue will be clarified over the next several months and it is likely, though not certain, that the Trump administration will still implement a salary threshold increase, even if it is less significant than that contemplated by the Department of Labor under the Biden administration.
If you have questions about how your organization should proceed under the current circumstances, please reach out to Jim Carroll, Lauren Burand or your Buelow Vetter attorney.
