On April 23, 2024, the Department of Labor (“DOL”) released a final rule raising the salary threshold for employees to qualify as exempt from federal overtime and minimum wage requirements. This rule was scheduled to take effect July 1, 2024. Almost immediately, the rule was challenged in court for being outside the DOL’s authority to issue.

There are currently two cases pending in federal court in Texas challenging the rule. On June 28, 2024, the court in State Of Texas v. United States Department of Labor et al. granted Texas’s request for preliminary injunction, but limited that relief to the state of Texas as an employer.

This means that the DOL’s rule, scheduled to take effect July 1st, is put on hold only for Texas state government employers until a final decision is reached. Texas originally requested that the rule be postponed nationwide, but the court determined that because there were no other parties or other parties’ interests represented in the case, it would be inappropriate to expand the ruling across the country.

What action do I need to take?

Unless you are a branch of the state of Texas government, the new salary threshold remains in place for you. This decision may foreshadow what’s to come for the new rule nationwide, but for now, almost all employers across the country remain responsible for ensuring their employees are properly classified under the new exemption rules.

For employees who make less than the new thresholds, that means employers either need to pay them the new salary or reclassify them as non-exempt, track their work hours, and pay them overtime. (Remember, though, that an employee isn’t exempt just because they meet the salary threshold—they must also perform certain job duties.)

For more information about the DOL’s final rule, review our recent blog post. We are monitoring developments surrounding this rule and will update our tools and inform our customers accordingly.