Breaking News: Texas Judge Halts Biden’s Plan to Extend Overtime Pay to Millions - What It Means for Your Business!

Legal Alert
from Attorney Bob

We wish to inform you of a critical legal update that significantly impacts the Fair Labor Standards Act (FLSA) overtime rules. On November 15, 2024, the U.S. District Court for the Eastern District of Texas issued a decision vacating the Department of Labor's (DOL) 2024 final regulation which had revised the salary threshold for the "white-collar" overtime exemptions.

​Background of the Court’s Decision

​The court invalidated both the July 1, 2024, increase and the planned January 1, 2025, increase. Initially, the DOL had raised the minimum salary to $844 per week ($43,888 annually) effective from July 2024. This was set to rise further to $1,128 per week ($58,656 annually) in January 2025. However, the court ruled that these changes created an improper "salary only" test for exempting employees from overtime, exceeding the DOL's statutory authority under the FLSA.

Current Status of the Salary Threshold

As a result of the ruling, the increases have been nullified, reverting the salary threshold for overtime eligibility back to the previous level of $684 per week ($35,568 annually), last set in 2019. This rollback affects both the increases scheduled and the "highly compensated employee" (HCE) threshold adjustments.

Implications for WHLA Members

• Immediate Impact: All changes instituted by the July 2024 increase are now void. Employers who adjusted salaries or exemption statuses in response to the now-invalidated rule should consult with legal counsel before making any further modifications.
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• Future Developments: The DOL may appeal this decision, but with a change in presidential administration approaching, the direction of such an appeal remains uncertain. We recommend closely monitoring any further legal developments.

Recommended Actions

• Review and Adjust Payroll Practices: Given the court’s decision, review your current payroll practices to ensure they align with the reverted federal threshold and comply with state laws where they provide greater protections.
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• Stay Informed: Keep up to date with any appeals or new regulations that may arise from this decision.

This decision underscores the dynamic nature of employment law and the importance of staying vigilant in regulatory compliance. For detailed guidance or to discuss how these changes may specifically affect your operations, please reach out to your legal advisors.

Best regards,
​
Attorney Bob
Wisconsin Hotel and Lodging Association

Note: This alert is not legal advice and does not create an attorney-client relationship. It provides an overview of the law’s key components and provides factual background.

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About Attorney Bob

Bob Sanders is an Attorney and the founder of NextGen Legal. After spending over a decade in BigLaw, working with clients of all sizes across the US, he became acutely aware of the recurring barriers that deterred businesses from seeking proactive legal advice: shrinking legal budgets competing with escalating fees. This realization spurred Bob to create NextGen Legal, a firm designed to eliminate these barriers and provide clients with the high-quality legal advice they need, exactly when they need it. 

At NextGen Legal, we're transforming the traditional law firm model. Bob’s extensive experience in labor and employment law has been instrumental in shaping a service that offers both day-to-day legal counsel and rapid response for emergent issues. We strive to empower our clients with the knowledge and strategies necessary to navigate the legal landscape effectively and make confident employment decisions, without the fear of unexpected costs.
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Rated a Rising Star by SuperLawyers (an accolade reserved for only 2.5% of attorneys in Wisconsin), Bob provides strategic legal advice and counsel to companies of all sizes, helping business leaders make confident, informed decisions. His expertise spans employment law, regulatory compliance, litigation, safety, corporate strategy, and risk mitigation. Bob excels in transforming complex legal challenges into clear, actionable business solutions, offering strategic guidance to leadership teams.

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