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Federal Judge Strikes Down DOL Salary Threshold Changes
15 November 2024
The increase in minimum salary to determine exempt status has been struck down in court. What does this mean for your business?
A Texas based Federal Judge has struck down this year’s Department of Labor attempt to increase the minimum salary threshold for salary exempt employees from $684/wk to $1,128/wk by Jan 1, 2025. Not only is the scheduled increase set for Jan 1 cancelled, but the increase that occurred on July 1 (increasing to $844/wk) has also been rescinded.
That is to say: for those employees that LEGITIMATELY meet the Job Duty qualifications for Executive, Administrative, and Professional OT exemption, the minimum weekly salary is once again $684.
What does this mean for you? Depends on what you did when the threshold went up in July. If you changed anyone’s salary due to this increase (rather than converting them to hourly), I advise NOT trying to take that raise away. Monitor performance and the value of the position as you should always do regardless of pay structure, and just be aware that there is an option for renegotiating the salary down if warranted.
PLEASE NOTE: Employers in some States are unaffected by this ruling, as they are held to a higher than Federal salary threshold already. These include:
CA = $1,280/wk (adjusted automatically based on State Min Wage)
CO = $1,057.69/wk
AK = $938.40/wk
NY (NYC, Long Island, Westchester County) = $1,237.50/week.
Finally, remember, the salary threshold for Executive, Administrative, and Professional OT exempt status is only ONE component to determine a legitimate classification.
If you have ANY doubt on the validity of your employee’s exempt status classifications, or just want a crash-course in what this is all about, don't hesitate to schedule a consultation with me to review in detail. This type of discussion is always free for any Retainer client. Please let me know how we can help!
For more details on the court case and outcome, reference this Bloomberg Law article.
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