White Collar Exemption Salary Threshold Rule Challenged as July 1 Effective Date Looms

The State of Texas and a coalition of business organizations have filed two separate legal challenges seeking to block the U.S. Department of Labor’s rule increasing the requisite salary level for the “white collar” exemptions from the federal Fair Labor Standards Act’s overtime rules. We describe the rule’s potential impact on employers here.

The State of Texas has moved for interim injunctive relief that would stop the Department of Labor from enforcing the rule, or at least postpone the rule’s July 1, 2024 effective date, pending the outcome of the legal challenge. The Honorable Sean D. Jordan of the Eastern District of Texas, a Trump appointee, has scheduled a hearing date on the motion for interim injunctive relief for June 24, 2024. We expect a ruling prior to the rule’s current effective date. If the Court enters an injunction, it would at least temporarily relieve employers of their obligation to comply with the rule.

We will continue to monitor and report on legal challenges to this rule. Honigman’s Labor and Employment attorneys remain available to discuss the proposed rule and how to prepare for its implementation.