2024 Overtime Regulation Overturned – Now What?

In July, we posted an article about a change in the overtime rules put out by the Department of Labor. To summarize, in April, the DOL passed a new overtime rule that raised the minimum weekly salary to qualify for exemption from overtime from $684 per week to $844 per week or the equivalent salary of $43,888 per year. There was a ministerial exception, but if you had any non-ministerial employees who made less than the annual salary equivalent of $43,888 per year ($844/week), they needed to track their hours, and you need to pay them overtime (1.5x their hourly rate) for those hours worked over 40 per week starting July 1. And there were regularly scheduled increases after that, the first of which was supposed to be January 1st. Many of you may have made some changes - such as raising salaries to keep employees exempt or changing the status of some employees to non-exempt and requiring them to report hours.

On November 15, 2024, a federal judge in Texas struck down this rule. The judge emphasized that an employee’s exempt status should primarily depend on their duties, not their salary. This ruling applies nationwide.
 

What this means for you today:

The salary threshold for exempt status now reverts to the 2019 ruling, which is $684 per week or $35,568 annually. The ministerial exception still applies as it did before and after the ruling. The DOL could appeal the decision, but this type of appeal failed in 2016, and most believe it will not be appealed.
 

What you can do:

If you changed an employee to non-exempt and required them to report hours, you can change them back to exempt. If you increased someone’s salary over the threshold, you can revert their salary back to the previous level, but you should be mindful of the negative impact on morale and possible legal action.

If you have any questions or if we can be of any assistance to you in this matter, please feel free to reach out to the Finance and Accounting Department at Texas Baptists.