Town Hall – Overtime Rule Update: Legal Insights and Discussion

Martha Boyd, Chair of the Labor and Employment Practice Group at Baker, Donelson, Bearman, Caldwell & Berkowitz, PC, will join CNE for an informative and interactive discussion on recent updates regarding the Labor Department’s overtime rule.

 From the National Council of Nonprofits:

A federal district judge in Texas invalidated the Labor Department’s overtime rule. The ruling applies to the higher salary level test that went into effect this past July 1 and blocks the next change set for January 1, 2025. He also invalidated the automatic increases scheduled for every three years.

In striking down the rule, the judge found that the Labor Department’s “2024 Rule plainly exceeds its authority under the [Fair Labor Standards Act].” The judge basically struck down the rule on the same basis as a different Texas federal judge invalidated the Obama Era rule in 2016. In both cases, the judges found that the high salary level test imposed by the rule essentially rendered moot the job duties tests that are the basis of the overtime exemption for white collar employees – executives, managers, administrators, etc. 

While the U.S. Department of Labor can appeal the decision, it is likely that the incoming Trump administration will do what it did back in 2017 – withdraw the appeal and all today’s decision to be the final word on the issue. The Trump DOL could start rulemaking to revise the overtime rule again, but that’s not an early priority.

•       Ruling: Memorandum Opinion and Order, State of Texas v. DOL, E.D. Tex., No. 24-00499, Nov. 15, 2024.

•       Texas Judge Tosses Biden Overtime Expansion for Millions, Rebecca Rainey, Bloomberg Law, Nov. 15, 2024.

We’ll continue to share updates as we receive them.