Background

On Nov. 15, 2024, ABC applauded the decision of the U.S. District Court for the Eastern District of Texas, which vacated the U.S. Department of Labor’s controversial 2024 final rule, Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees. The rule changed overtime regulations under the Fair Labor Standards Act.

ABC joined a coalition of business groups in filing a complaint in the U.S. District Court for the Eastern District of Texas challenging the DOL’s overtime rule in May 2024. The litigation is currently ongoing.

The court found that the Biden-era DOL’s overtime rule’s July 1, 2024, increase was unlawful, as was the increase scheduled for Jan. 1, 2025. Specifically, the DOL’s final rule increased the minimum annual salary level threshold for exemption to $43,888 on July 1, and it was scheduled to increase to $58,656 on Jan. 1, 2025. In addition, the threshold for highly compensated employees increased to $132,964 on July 1, 2024, and was scheduled to increase to $151,164 on Jan. 1, 2025. Further, salary thresholds would have been updated every three years starting on July 1, 2027.

As a result of this decision, the minimum salary threshold for exemption is once again set to $35,568, and the threshold for highly compensated employees is set to $107,432.

Desired Outcome

The court’s decision is the correct one, and an important win for ABC members and the rest of the regulated community. The 2024 final rule would have disrupted the construction industry, harming small businesses, restricting employee workplace flexibility in setting schedules and hours and limiting career advancement opportunities.

ABC urges the DOL to rescind the Biden administration’s overtime final rule.