The U.S. Department of Labor’s new regulation–raising the salary threshold for exempt employees under the Fair Labor Standards Act–went into effect yesterday, July 1, 2024. This means that companies across the country must increase the amount of money paid to salaried employees (from $684 a week to $844 a week) in order to avoid paying overtime premiums. The DOL proposed the rule in August 2023 and issued the rule formally in April 2024. The rule was poised to go into effect on July 1, 2024, but in May 2024, a group of businesses, along with the State of Texas, filed lawsuits to block the implementation of the law. Those lawsuits were combined together, and the plaintiffs filed a motion for a preliminary injunction (a court order) that would prevent the rule from going into effect.
Texas Court Issues Decision on Motion to Freeze the DOL’s Rule for the Salary Threshold
On June 28, 2024, the federal trial judge in Texas ruled on that motion and found that the DOL’s proposed rule exceeds the department’s legal authority in issuing changes to the salary level without Congress’s approval. Therefore, the court GRANTED an injunction that blocked the rule from going into effect, but only for the Texas government employees. The court rejected the request for a nationwide injunction that would stop the rule throughout the country. This means that for the remaining 49 states in the Union (and all private employees in Texas), the DOL’s salary increase is active and in effect. Moving forward for South Carolina employees, if your company claims an exemption from overtime pay for your position, then the company must increase your salary to at least $844 a week. Otherwise, you will be entitled to overtime pay for any hours worked over 40 in a workweek.
What Can South Carolina Employees Expect Moving Forward?
In the near future, we can expect to see other lawsuits filed in different states across the country over the salary threshold increase. The U.S. Supreme Court’s ruling last week that overturned Chevron deference (a 40-year old case that gave more leeway to agencies like the DOL to create regulations and have the court’s defer to them in some cases) means that other federal courts will likely be more inclined to issue rulings against the salary increase rule in their own jurisdictions. There are also other pending lawsuits in Texas and elsewhere that could result in similar outcomes.
I’ll keep following the updates on this issue, but in the meantime, South Carolina employees should have their salary threshold increased but have not can reach out to our office for a consultation of their legal rights and possible claims.
