For now, the new salary exemption increase has been blocked. It is highly unlikely it will get pushed through under the new administration.
On 11/15/2024, a federal judge has invalidated the Department of Labor’s planned salary threshold increases for FLSA exemptions. The court ruled that the increase exceeded the DOL’s authority, as it prioritized salary over job duties in determining exemptions.
These changes, scheduled for January 1st 2025, would have raised the minimum salary for exempt workers from $43,888 to $58,656. But this ruling actually sends us back to the old rate of $684 per week ($35,568 annually).
This also blocked the “Highly Compensated Employees (HCEs)” salary basis legal changes from taking place. The old rate for HCEs of $107,432 is now back in effect (versus the July 2024 rate of $132,964 and the January 2025 rate of $151,164).
Employers who’ve adjusted salaries in anticipation are advised to maintain current pay structures but consider potential legal and morale impacts before reversing increases. Appeals are expected, but enforcement under the next administration seems unlikely. Regular exemption reviews remain beneficial for compliance.
https://apnews.com/article/judge-blocks-overtime-pay-biden-rule-8469c6980f9305c60f1670ed1d8362e2
