Overtime Pay Exemption Now Lowered For Salaried Workers

Trump era EPA exemption reinstated by federal court limiting overtime pay for salaried workers.

On Nov. 15, according to Bloomberg Law, the Department of Labor (DOL) suffered a hit to its new guidelines for overtime pay.

The United States District Court Eastern District of Texas ruled that executive, administrative, and professional (EAP) salaried employees earning above $35,568 will no longer receive federal minimum wage for overtime work.

The amount was rolled back from the current Biden administration threshold of $43,888.

In his ruling, Judge Sean Jordan of the Eastern District of Texas stated that the administration overreached its authority when modifying the rule.

“The State of Texas and a coalition of trade associations and employers (“Business Organizations”) contend that the 2024 Rule’s changes to the salary level exceed the Department’s authority under the FLSA.”

Judge Jordan states that a change in the wage for a salaried exemption does not meet the requirements without adding or modifying the duties of employees.

The ruling “essentially ma[de] an employee’s duties, functions, or tasks irrelevant if the employee’s salary f[ell] below the new minimum salary level,” and unlawfully “ma[de] salary rather than an employee’s duties, the determinative factor for the EAP Exemption,“ Jordan said.

The rise in salary exemption was an attempt by the Biden administration to allow salaried workers to profit from labor that exceeds the standard 40-hour work week. The administration released a statement regarding the initial change from $35,568 to $43,888.

“This rule will restore the promise to workers that if you work more than 40 hours in a week, you should be paid more for that time. Too often, lower-paid salaried workers are doing the same job as their hourly counterparts but are spending more time away from their families for no additional pay. That is unacceptable. The Biden-Harris administration is following through on our promise to raise the bar for workers who help lay the foundation for our economic prosperity.

The EAP Exemption was scheduled to raise the overtime threshold to $58,656 in January 2025 and continue to rise every three years. The reversion to the 2019 Trump policies will see millions of EAP Americans lose access to the benefit.