Navigating the DOL Reversal of the White-Collar Exemption Salary Threshold Increase

In April 2024, the U.S. Department of Labor (DOL) released a rule to increase the salary threshold for white-collar exemptions in two phases: on July 1, 2024, from $684 per week ($35,568 annually) to $844 per week ($43,888 annually); and on January 1, 2025, to $1,128 per week ($58,656 annually). This rule will impact millions of American workers. 

On November 15, 2024, the Federal District Court of the Eastern District of Texas struck down the DOL's final regulation to increase the salary threshold for white-collar overtime exemptions nationwide. The ruling now negates both the July 1, 2024, and January 1, 2025, increases, returning the salary threshold back to $684 per week. 

Impact on Employers: What the Ruling Means for Your Organization 

Guidance for the first increase on July 1, 2024, resulted in employers reviewing their exemption status and salary levels for employees whose salaries fell below the $684 weekly amount and acting to either increase the salary or change the exemption status to nonexempt. Employers outside of states where the salary threshold exceeds federal mandates should have already complied with those rules. 

While no change is mandated, now is an excellent time to review all job descriptions to make sure the duties and responsibilities reflect the current roles, benchmark the salaries, and determine which positions will be exempt or non-exempt.  

Exemption status goes beyond what legislation dictates from a compensation perspective. Determine the status based on up-to-date job content and hierarchical level (i.e., the degree to which an individual manages people and/or a function). 

The Importance of Compliance and Regular HR Program Reviews

This latest development in the HR environment reminds practitioners that all aspects of compensation and human resources programs must be continually reviewed, compliant with legislation, and mindful of best practices. These programs are the foundation of a company’s most valuable asset—its people.