No Items in Cart 
On April 24th, 2025, the U.S. Department of Labor (DOL) officially notified the U.S. Court of Appeals for the Fifth Circuit (Fifth Circuit) that it intends to reexamine the 2024 Overtime Protections Minimum Salary Rule. Specifically, this final rule expanded overtime protections for most low-paid salaried workers who earn less than $844 a week (or $43,888 a year). Additionally, the final rule included an automatic increase within six months of its effective date. In January 2025, the DOL announced its annual civil monetary penalty adjustments.
History of the Overtime Exemptions Minimum Salary Rule
Previously, in April 2024, the DOL and the then-President Biden administration announced the new overtime exemptions final rule. Explicitly, the DOL’s final rule increased the salary threshold for overtime exemption under the FLSA to $844 per week ($43,888 per year). This meant that salaried employees who earned less than $43,888 a year would be eligible for overtime pay. In addition, the final rule wanted to accomplish the following:
- Giving more workers pay or valuable time back with their families.
- Providing regular updates to ensure predictability. The rule established regular updates to the salary thresholds every three years to reflect changes in earnings. This would protect against future erosion of overtime protections so they do not become less effective over time.
The rule’s effective date was July 1st, 2024. On January 1st, 2025, the overtime threshold would increase to $1,128 per week ($58,656 annually).
Finally, the overtime threshold for highly compensated employees (HCEs) would also change. Beginning on July 1st, 2024, the annual compensation level for HCEs to be exempt from overtime pay would increase from $107,432 to $132,964. On January 1st, 2025, that level would rise to $151,164.
Recission of the Overtime Exemptions Minimum Salary Rule
On November 15th, 2024, the U.S. District Court for the Eastern District of Texas (Texas District Court) issued a nationwide stay on the new rule, stating that the new salary threshold was too high. Accordingly, the ruling stated that the DOL created a de facto “salary only” test for the overtime exemption rules. As Littler reported, the new rules were “in excess of the DOL’s authority” as allowed under the Fair Labor Standards Act (FLSA). Finally, the Texas District Court found that since the rule covered hundreds of thousands of employers and millions of employees, both the July 1 and January 1 provisions needed to be struck down nationwide.
As a result of the Texas District Court decision, on December 4th, 2024, the DOL under the Biden administration filed an appeal. Explicitly, that appeal was filed with the Fifth Circuit Courts. The appeal was unable to be heard prior to the January 21 inauguration of President Donald Trump. Indeed, there was an uncertainty as to whether or not the new DOL would continue to pursue the appeal. Markedly, all questions were answered on April 24th, 2025, when the DOL filed a motion with the Fifth Circuit. Specifically, the agency asked the Fifth Circuit to hold the pending appeals in “abeyance.” Such an action would allow the DOL to reconsider the new rule. The court filing is the first clear indication that the DOL will not likely resurrect the Biden overtime protections minimum salary rule.
Current Salary Threshold and Overtime Protections Minimum Salary Rule Under the FLSA
As the nation’s primary wage law and one of the major employment laws employers must follow, the Fair Labor Standards Act (FLSA) establishes minimum wage and overtime protections for non-exempt part-time and full-time employees. However, under section 13(a)(1) of the FLSA, employees paid above the FLSA’s current salary basis are generally exempt from overtime provisions. To qualify for overtime exemption, employees must be paid on a salary basis at not less than $684 per week. These exempt employees must also perform at least one of the duties of an executive, administrative, or professional employee. These duties include:
- company or departmental management;
- regularly directing work;
- hiring, firing, promoting, or suggesting such employment actions;
- exercising discretion and independent judgment in matters of significance;
- performing work that requires advanced knowledge in science or learning acquired through specialized academic training; and
- using originality, talent, imagination, or invention in a recognized artistic or creative field.
