Legal Update - DOL Final Rule Increasing FLSA Minimum Salary Thresholds for Overtime Exemptions

In April 2024, the U.S. Department of Labor (DOL) finalized a regulation that increased the minimum salary thresholds for workers to qualify for overtime exemptions under the Fair Labor Standards Act (FLSA). The new rule raised the salary level for exempt executive, administrative, and professional employees, effective July 1, 2024, from $684 per week ($35,568 annually) to $844 per week ($43,888 annually). The rule would have also increased the threshold a second time to $1,128 per week ($58,656 annually), effective January 1, 2025, with automatic increases every few years to keep pace with inflation. The rule aimed to extend overtime protection to more workers by making it harder for employers to classify low-salary workers as exempt from overtime. The rule did not, however, impact the duties tests that must be met to qualify for the FLSA exemptions.

In November and December 2024, two federal courts in Texas struck down the DOL’s final rule, finding that it exceeded the DOL’s statutory authority under the FLSA. The courts found that the DOL’s approach, which significantly raised salary thresholds, effectively created a de facto rule about the classification of employees, which should be determined by Congress, not an administrative agency. Both rulings vacated all components of the rule, meaning both the July and January increased salary thresholds set under the final rule were no longer in effect and the automatic updates to the minimum salary threshold would not take place.

In November 2024, soon after the first Texas court ruling, the Biden administration’s DOL filed an appeal to the Fifth Circuit Court of Appeals. In February 2025, the DOL under the Trump administration appealed the second Texas court ruling. The appeals are currently pending. In April 2025, the DOL filed an unopposed motion to hold its appeals in abeyance pending the DOL’s reconsideration of the final rule, signaling the Trump administration’s likely intent to stop defending the rule.

• The new salary thresholds for overtime exemptions are not in effect following the Texas court rulings.
• Employers must continue to follow the pre-July 2024 minimum salary threshold ($684 per week) until further legal developments occur.
• Employees earning the minimum salary must still meet one or more of the FLSA duties tests to qualify for the overtime exemption.
• Employers and employees should continue to monitor the pending appeals and any new action taken by the DOL for further developments.
• If you have any questions about the FLSA’s overtime exemptions, you should contact the Atlanta, Georgia overtime lawyers at Fidlon Legal.