Federal Courts Reject Nationwide Injunction for New Overtime Rule

September 5, 2024
Hall Benefits Law, LLC

Although the U.S. District Court for the Eastern District of Texas has blocked the U.S. Department of Labor’s (DOL) new overtime rule for Texas state employees, the initial salary threshold increases under the new rule went into full force and effect for the rest of the United States on July 1, 2024. The overtime rule raises the minimum salary threshold for employees classified as “exempt” under the Fair Labor Standards Act (FLSA). Exempt employees are not entitled to certain benefits under FLSA, such as overtime pay.

On July 1, 2024, the salary threshold exemptions for white-collar employees increased from $684 per week or $35,568 per year to $844 per week or $43,888 per year. Furthermore, on January 1, 2025, the salary threshold exemptions will increase to $1,128 per week or $58,656 annually. After that, automatic increases to the salary threshold exemptions will occur every three years, beginning on July 1, 2027.

In a separate lawsuit, the U.S. District Court for the Northern District of Texas rejected Flint Avenue LLC’s argument that a nationwide preliminary injunction was necessary to avoid increased payroll costs since the portion of the new overtime rule going into effect on July 1, 2024, would not affect any of the company’s employees. However, attorneys for Flint Avenue predicted that the Court would strike down the overtime rule at a later stage in the litigation before the next stage of the rule goes into effect. That conclusion may be even more likely now that the U.S. Supreme Court has overturned the Chevron doctrine in its recent decision in Loper Bright Enterprises v. Raimundo. The high Court’s ruling paves the way for lower courts to find that the DOL improperly interpreted FLSA in issuing the new overtime rule.

HBL has experience in all areas of benefits and employment law, offering a comprehensive solution to all your business benefits and H.R./employment needs. We help ensure you are in compliance with the complex requirements of ERISA and the IRS code, as well as those laws that impact you and your employees. Together, we reduce your exposure to potential legal or financial penalties. Learn more by calling 470-571-1007.

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Hall Benefits Law, LLC

HBL offers employers comprehensive legal guidance on benefits in mergers and acquisitions, Employee Stock Ownership Plans (ESOPs), executive compensation, health and welfare benefits, healthcare reform, and retirement plans. We counsel a wide spectrum of clients including small, mid-sized, and large companies, 401(k) investment advisors, health insurance brokers, accountants, attorneys, and HR consultants, just to name a few. HBL is passionate about advising clients, and we are dedicated to our mission: to provide comprehensive, personalized, and practical ERISA and benefits legal solutions that exceed client expectations.

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