On Nov. 15, 2024, the U.S. District Court for the Eastern District of Texas vacated the U.S. Department of Labor’s (DOL) final rule that increased the minimum salary requirements for employees exempt from the Federal Fair Labor Standard Act’s (FLSA) minimum wage and overtime protections under the executive, administrative and professional exemptions (also known as white-collar exemptions).

The DOL issued this final rule in April 2024, which had several parts. First, on July 1, 2024, the minimum salary for white collar exemptions increased from $684 per week ($35,568 annually) to $844 per week ($43,888 annually). Then, the minimum salary for white collar exemptions was set to increase again on Jan. 1, 2025 to $1,128 per week ($58,656 annually). Finally, the minimum salary was set to increase again in July 2027, automatically increasing every three years.

The Texas district court’s decision prevents the DOL’s final rule from going into effect on a nation-wide basis. The court reasoned that the rule exceeded the DOL’s statutory authority under the FLSA.

Based on the court’s decision, the increase to the overtime threshold scheduled on Jan. 1, 2025 will not go into effect. The decision also retroactively struck down the salary increase that went into effect on July 1, 2024. This decision sets the FLSA salary requirements for white-collar exemptions back to $684 per week.

Of course, many states have salary requirements for these exemptions that exceed the FLSA threshold. New York is one of these states. In New York City, Nassau, Suffolk and Westchester counties, exempt executive and administrative employees have a minimum salary requirement of $1,200 per week ($62,400 annually). For the remainder of New York state, the minimum salary requirement for the executive and administrative exemptions is $1,124.20 per week ($58,457.40 annually). These amounts increase on Jan. 1, 2025 to $1,237.50 ($64,350 annually) and $1,161.65 ($60,405.80 annually), respectively.

Notably, New York does not have a salary requirement for the professional exemption. Therefore, New York employers must follow the FLSA salary requirement for exempt professional employees, which, as described above, is back to $684 per week.

With this decision, employers should review their salary levels for exempt executive, administrative, and professional employees to ensure compliance with state and federal laws.

If you have any questions or would like any additional information, please contact Michael Billok, Natalie Vogel or any attorney in Bond’s labor and employment practice, or the Bond attorney with whom you are regularly in contact.

On Aug. 30, 2023, the U.S. Department of Labor (USDOL) issued a proposed rule to increase the minimum weekly salary to qualify for the Fair Labor Standards Act white collar exemptions from $684 per week (the annual equivalent of $35,568) to $1,059 per week (the annual equivalent of $55,068). This new proposed salary level is based on the 35th percentile of earnings of full-time salaried workers in the lowest-wage Census Region. When the exempt salary level was last raised to $684 effective Jan. 1, 2020, the USDOL set it at the 20th percentile of earnings of full-time salaried workers in the lowest-wage Census Region.

Read More >> U.S. Department of Labor Proposes to Increase the Salary Level to Qualify for the White Collar Exemptions

Employers are well aware of the risks a disgruntled employee may pose during their employment and even after their employment has ended. Sometimes, however, employers do not discover an employee’s unscrupulous behavior until after an employee has sued their employer for violation of one or more employee protection statutes, i.e., the New York Labor Law (NYLL), Fair Labor Standards Act (FLSA) or New York State Human Rights Law (NYSHRL). These statutes, however, also contain prohibitions against retaliation, leading many employers to question whether they could or should countersue an employee for tortious conduct and potentially risk a claim for retaliation. The Second Circuit in Kim v. Lee, 2023 WL 2317248, 22-61 (2d Cir. March 2, 2023), shed some light on this topic and held that an employer’s counterclaim is retaliatory when it is baseless or frivolous. The Court did not, however, decide whether non-frivolous counterclaims might support a valid retaliation claim.

Read More >> The Intersection of Employer Counterclaims and Retaliation: An Analysis of the Second Circuit’s Recent Decision in Kim v. Lee

On Feb. 22, 2023, the Supreme Court of the United States (SCOTUS) decided Hewitt v. Helix Energy Sols. Grp., Inc.[1] In granting certiorari, the Court addressed the following question: Is a supervisor, who makes over $200,000 annually, calculated on a daily rate, considered a “Highly Compensated Employee” (HCE) who is overtime exempt under the FLSA? In a 6-3 decision, the Court ruled that the supervisor is not an HCE and is not overtime exempt.

Read More >> Supreme Court Limits “Highly Compensated Employee” Exemption under the Fair Labor Standards Act (FLSA): A Review of Hewitt v. Helix Energy Sols. Grp., Inc.

On Oct. 11, 2022, the U.S. DOL of Labor (DOL) released a Notice of Proposed Rulemaking that would revise the analysis for determining independent contractor status under the Fair Labor Standards Act (FLSA). The proposed standard would rescind the current rule that has been in effect since March 8, 2021.

Read More >> DOL Proposes New Rule For Independent Contractor Classification

On May 6, the U.S. Department of Labor (USDOL) withdrew its final regulations that would have revised the standard for determining whether a worker is an employee covered under the Fair Labor Standards Act (FLSA) or an independent contractor who is not subject to the FLSA’s minimum wage and overtime requirements. According to the USDOL, the independent contractor rule that was withdrawn “is inconsistent with the FLSA’s text and purpose, and would have a confusing and disruptive effect on workers and businesses alike due to its departure from longstanding judicial precedent.”

Read More >> The U.S. Department of Labor Withdraws Its Independent Contractor Regulations

Everybody knows that the statute of limitations for claims under the Fair Labor Standards Act (FLSA) is two years, unless the claim is for a willful FLSA violation, in which case the statute of limitations is three years. Okay, maybe everybody doesn’t know that—but attorneys who regularly bring or defend wage-and-hour claims certainly do (and if you’re reading this blog, you probably do as well). So an FLSA claim filed in 2021 based on allegations from 2017 can be easily dismissed at the outset of litigation, because such a claim is clearly beyond the longest possible statute of limitations of three years. Now, consider this: what if a plaintiff files a claim in May 2021, alleging an FLSA violation from June 2018? In that case, the only way the plaintiff can bring a valid FLSA claim is if the claim is willful, because then the plaintiff could utilize the three-year statute of limitations.

Read More >> Dismissing Non-Willful Claims Under the FLSA – the Second Circuit Rules on an Issue of First Impression

On February 23, 2021, the U.S. Department of Labor (DOL) sent a proposed new regulation on joint employment status under the Fair Labor Standards Act (FLSA) to the White House for regulatory review. This action is indicative that new guidance will follow for determining joint employer status when an employee performs work that benefits more than one employer. 

Read More >> DOL Sends Proposed New Joint Employer Rule to White House for Review

On August 24, 2020, the United States Department of Labor (DOL) issued guidance to assist employers in complying with their obligation to track compensable hours of employees working in remote or telework arrangements.  While this guidance was issued in response to the increase in remote work due to the COVID-19 pandemic, it applies to all employees working remotely for any reason.

Read More >> USDOL Issues Guidance on Tracking Compensable Hours of Remote Employees

On June 8, the U.S. Department of Labor issued its final rule to provide some clarity for employers seeking to use the fluctuating workweek method of computing overtime compensation under the Fair Labor Standards Act. The final rule, which is essentially the same as the proposed rule that was issued on November 5, 2019, lists each of the five requirements for using the fluctuating workweek method separately and explicitly states that bonuses, premium payments, and other additional payments of any kind are compatible with the use of the fluctuating workweek method. The final rule becomes effective on August 7.

About one week after the USDOL's fluctuating workweek rule was issued, the Second Circuit Court of Appeals (the Federal appellate court with jurisdiction over employers in New York) issued a decision in the case of Thomas et al. v. Bed Bath & Beyond Inc. In the Bed Bath & Beyond case, the Second Circuit affirmed the dismissal of a collective action filed by a group of Department Managers who alleged that Bed Bath & Beyond had improperly used the fluctuating workweek method to pay them overtime.

Read More >> Positive Developments for New York Employers on the Use of the Fluctuating Workweek Method of Computing Overtime Compensation

Employers in New York will be required to comply with the new state minimum wage rates and the new state salary thresholds to qualify for the executive and administrative exemptions, effective December 31, 2019.

Read More >> Reminder: New York Minimum Wage Rates and Salary Thresholds for the Executive and Administrative Exemptions Will Increase on December 31, 2019

On November 5, the U.S. Department of Labor published a proposed rule in the Federal Register to provide some clarity for employers that seek to use the fluctuating workweek method of overtime compensation under the Fair Labor Standards Act.  The proposed amendment lists each of the five requirements for using the fluctuating workweek method separately, instead of including all of the requirements in paragraph form as the current regulation does.  The proposed amendment also includes additional language not currently contained in the regulation, explicitly stating that bonuses, premium payments, and other additional payments of any kind are not incompatible with the use of the fluctuating workweek method of computing overtime.

Read More >> The USDOL Issues a Proposed Rule to Clarify and Amend the Fluctuating Workweek Method of Overtime Compensation