Late Friday, the U.S. District Court for the Eastern District of Texas vacated the U.S. Department of Labor’s (DOL) regulations that had increased the salary level test for exemption status.
The Court held that the DOL had exceeded its statutory authority by raising the salary level test to the point this test took precedent over the job duties test for the Executive, Administrative, and Professional exemptions. The job duties test is prescribed by statute, whereas the salary level and basis tests were developed decades ago by the DOL.
The test was set at $844/week ($43,888) as of July 1st of this year. It was scheduled to increase to $1,128/week ($58,656) on January 1, 2025. This ruling returns the salary level test to the level it was before July 1st – $684/week ($35,568/yr.).
This decision also vacates the Highly Compensated Employee test currently at $132,964/yr and was set to increase to $151,164/yr. January 1, 2025. It will now return to $107,432/yr. In addition, it relinquishes the rule’s future indexed increase provisions for Executive, Administrative, and Professional as well as the Highly Compensated Employee salary level tests.
Article courtesy of SBAM-approved partner, ASE.
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