Overtime salary threshold rule vacated

Intro

A rule from 2024 that was supposed to give more people overtime pay got stopped in court. Folks earning just above the line for overtime had waited months to see what would happen, and now they’re stuck in limbo again.

What Changed

Two Texas courts threw out big pieces of the Labor Department’s overtime update, one ruling in early November, another in mid-December. That update would have raised the cutoff for who qualifies for extra pay when they work long weeks. With those rulings, the old, much lower federal line stays in place. That means assistant managers, small-office administrators, nonprofit staffers, and supervisors working fifty or sixty hours a week for a fixed salary still won’t see extra pay. People at local clinics, charter schools, youth programs, or family-run stores feel it most, because they often work long hours but make just under the new proposed limit. Employers who had promised new raises are now holding off, waiting for the next court round. HR teams that reclassified people as hourly now aren’t sure what to do. Some workers will be shifted back to salary, losing overtime, while others might get fewer hours to save money.

What to Watch Next

Keep an eye on the Fifth Circuit appeal. The Labor Department might rewrite a smaller version of the rule. In states like California, Washington, and New York, stronger overtime laws stay in place, so workers there have higher pay protection. For everyone else, it’s a waiting game, and paycheck size still depends on where you live.