Great Lakes Wire

Late Friday, the U.S. District Court for the Eastern District of Texas overturned regulations from the U.S. Department of Labor (DOL) that had increased the salary level test for exemption status.

The court determined that the DOL had overstepped its authority by elevating the salary level test to a point where it overshadowed the job duties test for Executive, Administrative, and Professional exemptions. The job duties test is established by statute, while the salary level and basis tests were developed by the DOL decades ago.

As of July 1st this year, the salary level was set at $844 per week ($43,888 annually) and was scheduled to rise to $1,128 per week ($58,656 annually) on January 1, 2025. This ruling reverts the salary level test back to its previous rate before July 1st—$684 per week ($35,568 annually).

The decision also nullifies the Highly Compensated Employee test which is currently at $132,964 annually and was set to increase to $151,164 annually on January 1, 2025. It will now return to $107,432 annually. Furthermore, it removes future indexed increase provisions for Executive, Administrative, and Professional as well as Highly Compensated Employee salary level tests.

Article courtesy of SBAM-approved partner, ASE.