NEW OREANS – In April, the Department of Labor revised the Fair Labor Standards Act (FLSA) to raise the salary threshold for exempt and highly compensated employees. The revised regulations, which came into effect on July 1, expanded overtime coverage to 3.6 million workers, but the U.S. District Court for the Eastern District of Texas vacated the Department’s 2024 final rule, thereby halting its implementation and restoring salary thresholds previously in effect.
The decision on November 15, in the State of Texas v. Department of Labor, Case No. 24-cv-468-SDJ, vacates the rule nationwide for executive, administrative, and professional (EAP) exemptions and for the highly compensated employee exemption.
This means that the planned executive, administrative, and professional (EAP) exemptions salary threshold increase to $844 per week (or $43,888 annually) is no longer valid. Future staged increases, including the January 1, 2025, threshold of $1,218 per week ($58,656 annually) and automatic updates starting July 1, 2027, are also void.
Instead, employers should revert to the prior salary threshold of $684 per week ($35,568 annually) for EAP exemptions.
It also means that the planned highly compensated employee exemption salary threshold increase to $132,964 is no longer valid. Future staged increases, including the January 1, 2025, threshold increase to $151,164, is now void. Instead, employers should revert to the prior salary threshold of $107,432 per year for highly compensated employee exemptions.
Louisiana follows federal overtime standards established by the Fair Labor Standards Act but the Louisiana Workforce Commission does not have an enforcement role regarding this rule and, until and unless the appeal is successful, Louisiana will follow the thresholds under the 2019 Overtime Rule that existed prior to the voided changes.
The Louisiana Workforce Commission is advising employers to be prepared in the unlikely event that the Department of Labor wins its appeal. If they do, more workers will become eligible for overtime and employers will need to decide whether to pay the additional overtime, increase salaries beyond the proposed thresholds, or change employees’ job classifications.
