05/08/2025

DOL Tells Federal Court It Intends to Reconsider 2024 Overtime Rule

The Department of Labor (DOL) stated in a recent filing with the U.S. Fifth Circuit Court of Appeals that it intends to reconsider the overtime rule finalized by the Biden Administration. Published in April 2024, this rule (Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees) established a two-step increase in the annual salary that must be paid for executive, administrative and professional employees to be classified as exempt from overtime; the first increase took effect July 1, 2024 (rising from $35,568 to $43,888 per year) and the second was scheduled to take effect January 1, 2025 (rising to $58,656).

In November 2024, however, the U.S. District Court for the Eastern District of Texas vacated the rule, finding that DOL had exceeded its statutory authority. DOL appealed that ruling and, as the litigation has proceeded, LeadingAge has been watching for a signal about how the Trump Administration views the rule. On April 24, the Administration filed an unopposed motion with the appellate court to “hold these appeals in abeyance pending the agency’s reconsideration of the rule,” noting the change in Department of Labor leadership. It’s not clear precisely what DOL intends to do; it might decide to issue a new rule that raises the overtime salary threshold from its current level (under regulations effective January 1, 2020), but by a smaller amount than the 2024 rule would have done. LeadingAge will follow this issue closely, but meanwhile the statement to the court appears to be a clear signal that the new Administration is going to walk back the 2024 rule in one way or another.