We continue to see developments relating to the required “salary basis” minimum for exempt employees under the federal wage-and-hour law.   

In general, to be treated as exempt from overtime requirements under the executive, administrative or professional exemption, an employee must not only perform work that falls within one of those exemptions, they must also be paid on a “salary basis.”  To be considered paid on a salary basis, the employee must receive the same pay each payroll no matter how many hours they work, and that salary must meet the federal minimum salary requirement. 

The federal Department of Labor implemented changes to that minimum salary required for exemption over the last year, and those changes were challenged in multiple court actions.  On November 15, 2024, a federal court in Texas struck down the Department of Labor’s rule raising the minimum salary requirements for exempt employees. The decision invalidates the increase that went into effect July 1, 2024, as well as the increases set to go into effect January 1, 2025, and thereafter. As a result of this ruling, the prior minimum salary requirement of $684/ week ($35,568/year) remains in effect.  

Our labor and employment law team will continue to monitor further developments from the Department of Labor related to these issues and is available to consult regarding wage, hour and classification issues.