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On June 28, 2024, the U.S. District Court for the Eastern District of Texas issued a decision in the Texas attorney general’s case challenging the U.S. Department of Labor’s final rule on Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees. The judge in the case issued a limited preliminary injunction blocking implementation of the rule for employees of the state of Texas only.

For the rest of the employer community in Texas and throughout the nation, the rule went into effect on July 1. The minimum salary threshold for exemption increased to $43,888, and the threshold for highly compensated employees increased to $132,964.

In the second phase of the DOL’s final rule, on Jan. 1, 2025, the minimum annual salary level threshold for exemption increases to $58,656 and the threshold for highly compensated employees increases to $151,164. Salary thresholds will then be automatically updated every three years, regardless of economic circumstances. ABC issued a news release opposing the rule, which was issued on April 23.

Overtime resources from the DOL:

For more information, read Littler Mendelson’s analysis of the overtime final rule and watch ABC’s webinar, “Learn About the DOL’s New Overtime Rule in 30 Minutes.”

On May 22, ABC joined a coalition of business groups in filing a complaint in the U.S. District Court for the Eastern District of Texas, Sherman Division, challenging the DOL’s overtime rule. Read ABC’s news release announcing the lawsuit and learn more about the pending overtime lawsuits. ABC will continue to provide updates on any new developments regarding the pending legal challenges.

Virtually all of ABC’s members employ workers who qualify for exempt status, and like the unlawful 2016 overtime rule, the DOL’s 2024 rule will reclassify a substantial amount of ABC member employees who currently qualify for exempt status as nonexempt. This will disrupt the entire construction industry, specifically harming small businesses, as the rule will greatly restrict employee workplace flexibility in setting schedules and hours, hurting career advancement opportunities.

In addition, the 2024 rule’s radical increase in the salary threshold for exemption will further complicate the current economic outlook. Multiple industries, like construction, are grappling with uncertain economic conditions such as inflation, supply chain disruptions, high materials prices and workforce shortages, all of which push operational costs ever higher. Specifically, ABC estimates that the construction industry must hire more than half a million additional workers in 2024 to meet demand. The rule’s triennial automatic indexing provision will exacerbate the harmful impact on businesses and add to rampant inflation that is already harming the economy.

On Nov. 7, 2023, ABC submitted comments to the DOL in response to the proposed rulemaking, calling on the DOL to withdraw it. ABC also signed onto coalition comments criticizing the overtime proposed rule, joining 244 national, state and local organizations representing employers from a wide range of private industry and public, nonprofit and education sectors.