Texas Federal Judge Blocks on Nationwide Basis $58,656 Special Exempt Salary Rule

Employers scrambling to comply with the latest Fair Labor Standards Act (FLSA) exempt salary increase to $1,128 per week ($58,656 annually) that was scheduled for January 1, 2025, can breathe easier.

On November 15, 2024, the federal court in Sherman, TX, set aside on a nationwide basis the U.S. Department of Labor (DOL)’s final regulation increasing the salary threshold for the FLSA “white collar” overtime exemption.

The Court found that the increase exceeded the authority Congress delegated to the Labor Dept. for the FLSA. Specifically problematic to the judge was the provision that would automatically increase the exempt salary threshold every 3 years beginning in 2027.

The ruling also nullifies the July 2024 increase that raised the exempt salary level to $43,888. For now, the federal salary level for exemption returns to $35,568. It is unclear whether an appeal will be filed with the Fifth Circuit.

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