AIM HR Flash: Increase to Exempt Salary Threshold Reversed

News November 18, 2024

A dramatic increase in the number of workers eligible for overtime has been halted. On Friday, a federal judge overturned the Department of Labor’s 2024 overtime rule, resetting the salary threshold for overtime eligibility to $35,568.

This decision retroactively cancels the July increase to $43,888 and blocks the planned jump to $58,656 in January 2025. The U.S. DOL may appeal the decision. More information on the now sidelined increases can be found on the DOL website.

Additional Key Points:

• The ruling also eliminates the “escalator” provision, which would have increased the threshold every three years.
• Employers are advised to consult legal counsel before reversing changes made under the now-invalid rule.

What Does This Mean For You?

Take a breath and don’t react until you have had a chance to think through your next steps.

Don’t reverse course if you’ve already made changes to comply with the July 1st increase, or the planned January 1st increase. It’s best to check with your legal or HR advisors to ensure compliance across the board.

We know this raises questions, so we’re planning a session soon to walk employees through what this means and how to adjust. Stay tuned for details—it’s coming soon!