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Minimum Salary Not Increasing, 2024 Overtime Rule Overturned

A federal judge in the U.S. District Court in Texas has blocked the Department of Labor (DOL) rule that increased the salary thresholds for the new overtime pay regulations under the Fair Labor Standards Act (FLSA). Bottom line – the proposed increase in salary required to qualify for a salaried exempt position will not take effective on January 1, 2025. As a result, employers should use the older minimum salary rate that was set by the prior 2020 rule ($684 per week) or $35,568 per year. This happens because the earlier salary rate increase that took place on July 1, 2024, was also invalidated by the court’s decision. An appeal is possible, but would not likely be decided any time soon. Read more.

While employers may technically reduce salary increases that were granted earlier in July, it is not a recommended HR practice. Remember that an exemption from overtime depends on 2 factors: (1) paying a minimum salary (with no impermissible deductions) and (2) performing duties that qualify for the overtime exemption. The lower the salary, the more likely that the position is not performing work that contains enough independent judgment and discretion, or requires a sufficient level of education or advanced training.

Employers need to keep in mind that some states have minimum salary thresholds that are significantly higher than the federal threshold, and if you have remote employees in those states, you must follow the higher salary rule.

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