Pittsburgh, PA
The Legal Intelligencer
(by Steve Antonelli and Alex Farone)
Just as many employers were finalizing their 2025 budgets, on November 15, 2024, a federal court in Texas issued a nationwide injunction six weeks before the second of two meaningful changes to the federal overtime law was set to take effect.
Unless specifically exempted, the Fair Labor Standards Act (FLSA) requires covered employees to be paid overtime when they work more than 40 hours during a week. One group of employees that is exempted from the overtime requirements are those who qualify as executive, administrative, or professional (EAP) employees. To qualify for this overtime exemption, workers must perform certain job duties and be paid on a salary basis. Until earlier this year, to qualify for the exemption, workers had to be paid a minimum yearly salary of $35,568. In other words, those employees who earned in excess of this amount did not have to be paid overtime if they worked more than 40 hours in a week.
In April 2024, the U.S. Department of Labor (DOL) announced a final rule that qualified millions of additional employees for overtime pay because it increased the salary threshold required for the EAP exemption. The rule was to be implemented in phases. The first phase took effect on July 1 and called for an immediate increase to the minimum salary. Specifically, the first phase increased the salary threshold for the EAP exemption from $35,568 (which is $684/week) to $43,888 per year (which is $844/week). To comply with the new rule, employers across the nation had to increase the minimum salary paid to EAP employees by July 1, 2024, to avoid paying overtime to those workers. …