The Department of Labor (DOL) has appealed the November Eastern District of Texas district court ruling that overturned the agency’s updated white-collar exemption to the Fair Labor Standards Act’s (FLSA’s) overtime (OT) rules. However, the Trump Administration could reverse the decision to appeal to the Fifth Circuit Court of Appeals.

The rule that was struck down first by an Eastern District of Texas district court and then again in December in a different case by the Northern District of Texas district court would have increased the salary threshold for the white-collar exemption to $58,656/year as of January 1, 2025. It would have increased the highly-compensated employee (HCE) exemption amount to $151,164/year. Also struck down was the rule’s automatic adjustment to the salary threshold every three years. Both district court judges found that DOL exceeded its statutory authority.

Unless either of the district court decisions is overturned, the salary threshold for the white-collar exemption to the OT rules reverts to $35,568/year (and the HCE exemption to $107,432/year). There is no automatic adjustment for inflation to the salary threshold in place under current rules.

Prospects: Given wide GOP opposition to the overtime rule that has now been struck down, it seems likely that DOL, now that it will be run by the Trump Administration, will decide to withdraw the appeal. But that is not a certainty. And it will take a while before DOL’s new leadership is in place. While the Senate plans on action as quickly as possible on all of President Trump’s cabinet-level nominees, it will still take some time before Lori Chavez DeRemer, Trump’s choice to be DOL Secretary, will get through her nomination hearing and confirmation vote. A decision to withdraw the appeal is unlikely before the nomination process has been completed.

NAIFA Staff Contacts: Diane Boyle – Senior Vice President – Government Relations, at dboyle@naifa.org; or Jayne Fitzgerald – Director – Government Relations, at jfitzgerald@naifa.org; or Mike Hedge – Senior Director – Government Relations, at mhedge@naifa.org.