The fight for fair overtime pay has taken a disappointing turn, leaving millions of workers and employers in limbo. Just months after new regulations promised to raise the salary threshold for overtime eligibility—a move hailed as a major win for American workers—a federal judge in Texas has thrown a wrench into the plan.

On November 15, 2024, Judge Sean Jordan struck down the Department of Labor’s (DOL) updated rules, arguing that they overstepped authority by prioritizing salary levels over job duties. The decision not only halts a planned increase in January 2025 but also rolls back changes already implemented in July 2024. As a result, businesses nationwide are scrambling to adjust, with tough decisions ahead about how to navigate the fallout.

If you’re a salaried worker in the U.S. making between $35,568 to $58,656 a year ($684-$1,128 per week), you may have just lost your overtime for the New Year.

How Do I Know If I’m Affected?

The Fair Labor Standards Act (FLSA) sets rules for who qualifies for overtime pay—typically, time-and-a-half for any hours worked over 40 per week. For most hourly workers, the rule is straightforward: work extra, get extra. But salaried employees? It’s not that simple.

The DOL says that if you’re an executive, administrator, or professional meeting specific criteria, you qualify for the “white-collar exemption” and do not receive overtime pay. To figure out if you’re in that group, there’s a three-prong test:

You’re paid on a salary basis: Your paycheck is the same no matter how many hours you work.

Your job duties meet exemption standards: Think managers, high-level decision-makers, and specialized professionals like doctors or lawyers.

You earn more than a specific salary threshold: This is the hotly debated number.

In 2019, the threshold was set at $35,568 per year (roughly $684 per week, or about $17/hour). If you made less than this, you did not meet the “white-collar exemption and were entitled to overtime pay. But what happens when the cost of living goes up, and that threshold doesn’t?

The DOL’s Push to Expand Overtime

In April 2024, the DOL decided it was time for a change. They announced plans to raise the salary threshold in two steps:

July 1, 2024: $43,888 annually

January 1, 2025: $58,656 annually

These changes were set to make millions of workers eligible for overtime pay—an estimated 4 million nationwide. The DOL also wanted to avoid this back-and-forth debate by introducing automatic updates every three years.

For many, this was a win. Workers earning between $35,568 and $58,656 would no longer be exempt, meaning they could finally claim overtime pay for those grueling 50- or 60-hour workweeks. Employers? Well, they’d have to make adjustments—either paying overtime, raising salaries above the new threshold, or cutting back on hours to dodge extra costs.

Texas Sues the DOL

Just as workers were adjusting to the $43,888 threshold, the regulations hit a major roadblock. On November 15, 2024, a federal judge in Texas, Judge Sean Jordan ruled in favor of Texas in a lawsuit and struck those regulations down.

He found that the DOL did not have the authority to make these changes. He believed that focusing so heavily on salary thresholds ignored the job responsibilities that define whether someone is truly “exempt.”

The ruling rescinded both the July 2024 increase and the planned January 2025 bump. Overnight, not only Texas workers, who thought they were finally eligible for overtime, but also millions of workers nationwide lost that eligibility.

What Happens Now?

With the judge’s ruling, the overtime threshold reverts to the 2019 level: $35,568. Employers and employees alike are left scrambling to figure out what this means.

Some employers might start requiring salaried workers to track their hours, a move that could feel frustrating to professionals who’ve enjoyed flexibility. Others might cut salaries or restructure job roles to maintain their bottom lines. Without the higher thresholds, many are expecting to go back to long hours without extra pay.

Of course, the DOL could appeal Judge Jordan’s ruling. But the clock is ticking. There may not be enough time for the appeal to be heard before Donald Trump’s return to the White House in January 2025. And it’s unlikely his administration will push for a higher threshold. After all, Trump’s previous DOL settled on a threshold that was far below Obama’s proposal.

What Should Workers and Employers Do?

For workers: Know your rights. If your salary falls below the $35,568 threshold, you’re entitled to overtime pay, regardless of your job title. Keep an eye on legal updates—obviously, things can change quickly.

For employers: Plan ahead. Even if the threshold increase is on hold for now, it’s clear that changes to overtime rules are a priority for many policymakers. Proactively evaluating roles, salaries, and workloads can help you stay ahead of the curve.

Get Legal Help

From a legal standpoint, this change, while disheartening, is not surprising. Employment discrimination lawyers have a key role in ensuring that all employees, especially the most vulnerable, are treated fairly as businesses adapt to these changes. Denying overtime privileges can be a form of discrimination in certain circumstances. If you believe you have been discriminated against at work, contact Carter Law Group or fill out our questionnaire.

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