11/15/2024 Update: Minimum Salary For Exempt Employees
On November 15, 2024, a Texas Federal court ruled the Department of Labor had overstepped its authority with the most recent rule increasing the minimum salary for maintaining Executive, Administrative and Professional Employee Exemptions from Overtime pay under the Fair Labor Standards Act. The Texas ruling means that:
In short, the entire rule increasing the minimums was thrown out and the thresholds have reverted to what they were prior to July 1, 2024. Most executive, admin, and professional employees need to be paid at least $684 per week ($35,568 annually), and not the $844 required by the now-defunct July 2024 increase. Employees classified under the highly compensated employee exemption need to be paid at least $107,432 per year, as opposed to the increased $132,964.
Action Items - What do you need to do?
If so inclined, employers can roll back changes they made to comply with the rule in July 2024 and halt any plans for a minimum Exempt Employee salary increase in January 2025. However, Employers cannot retroactively reduce pay or change an employee’s classification. Employees should be made aware of any changes to their pay or classification before the changes take effect, and in compliance with any applicable state or local laws, which may have specific notice requirements before making a classification change.