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Important Update: Employers Are No Longer Required To Comply With The DOL’s 2024 Increased Salary Thresholds
On April 26, 2024, the Department of Labor (“DOL”) published its final rule, Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees (“Final Rule”). As discussed in our June 2024 article, The Laws They Are a Changing, Part II, the Final Rule required employers to implement salary increases on July 1, 2024 and January 1, 2025, respectively, in order for certain employees to qualify for the executive, administrative or professional exemption under the Fair Labor Standards Act (“FLSA”).
On November 15, 2024, the U.S. District Court for the Eastern District of Texas vacated the Final Rule. This means that the prior salary increase mandated on July 1, 2024 is void and that no increase is required to occur on January 1, 2025. As explained on the DOL’s website, the DOL is now “applying the 2019 rule’s minimum salary level of $684 per week and total annual compensation requirement for highly compensated employees of $107,432 per year.” Thus, the 2019 rule remains in full force and effect.
While the United States has filed a notice of appeal from the November 15th Court decision, the incoming Trump Administration could elect to abandon the appeal. Employers should now determine whether they will i) proceed with any scheduled changes based upon the previously anticipated increase on January 1, ii) roll back any salary increases previously made to comply with the July 1 increase, or iii) maintain any changes made to comply with the July 1 increase. In addition, employers must remain aware that some states, such as Colorado, require a higher salary threshold to be in compliance with state wage and hour laws.
Before rolling back any changes made due to the July 1 increase, employers should consult with legal counsel to ensure that there are no other legal hurdles in doing so, such as whether the affected employee has an offer letter or employment contract or whether the employee meets the duty requirements to qualify for an overtime exemption.
Based upon policy reversals and other changes made during the prior Trump Administration, employers should anticipate that there will be additional developments in the labor and employment law arena over the next 4 years. We are prepared for and remain ready to guide you through these changes as they occur.
Joan M. Vecchioli is a partner in the Clearwater office and is Board Certified in Labor and Employment Law by the Florida Bar.
Colleen M. Flynn is a partner in the Clearwater office whose practice focuses on Labor and Employment Law.
Rachael L. Wood is a partner in the Clearwater office whose practice focuses on Labor and Employment Law.
THIS ARTICLE IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND SHOULD NOT BE CONSIDERED LEGAL ADVICE. LEGAL ADVICE CANNOT BE GIVEN WITHOUT INFORMATION ABOUT YOUR SPECIFIC SITUATION.