Last evening, a federal court in Texas invalidated the U.S. Department of Labor’s rule raising the salary threshold for the Executive, Administrative, and Professional employee exemptions. Specifically, the court found the DOL’s process of setting the minimum salary threshold effectively eliminated the duties test for meeting the exemption. The duties test, in turn, was the basis for Congress granting regulatory power to the DOL. In short, the court found the DOL exceeded its authority.

What is more, the court invalidated the rule on a national basis – meaning the DOL cannot enforce the rule on any employers anywhere in the country. As we reported previously, the court earlier this year issued a preliminary injunction that applied only to Texas government employees. Last evening’s ruling expands the injunction to employees of both public and private employers across the nation. As such, the increased salary threshold of $1,128 per week set to take effect January 1, 2025, along with future indexed increases, will not take effect. Instead, the salary threshold reverts back to the previous DOL rule — $ 684 per week. There is no word yet on whether the DOL will appeal the court’s judgment.

The court’s judgment will, in some instances, cause confusion, particularly with respect to the initial salary threshold increase that took effect back in July 2024, which, by this ruling, is no longer in effect. If you have any questions on how to deal with the initial increase or how the court’s judgment affects your future plans, please contact Greg Feary, Jim Hanson, David Robinson, Don Vogel, Jack Finklea, or Prasad Sharma.