{"id":8033,"date":"2024-11-18T18:00:23","date_gmt":"2024-11-18T23:00:23","guid":{"rendered":"https:\/\/employerdefensereport.com\/?p=8033"},"modified":"2026-03-20T11:57:43","modified_gmt":"2026-03-20T15:57:43","slug":"biden-eap-overtime-exemption-rule-vacated-as-judge-sounds-death-knell-for-increased-salary-thresholds","status":"publish","type":"post","link":"https:\/\/www.connmaciel.com\/employer-defense-report\/biden-eap-overtime-exemption-rule-vacated-as-judge-sounds-death-knell-for-increased-salary-thresholds\/","title":{"rendered":"Biden EAP Overtime Exemption Rule Vacated, as Judge Sounds Death Knell for Increased Salary Thresholds"},"content":{"rendered":"

By <\/em>Scott Hecker<\/em><\/a>, Jordan B. Schwartz<\/em><\/a>, Kara M. Maciel<\/em><\/a>, and Lindsay A. DiSalvo<\/em><\/a><\/p>\n

On November 15, 2024, U.S. District Judge Sean D. Jordan of the Eastern District of Texas vacated the Biden Administration\u2019s overtime exemption rule.\u00a0 The final rule<\/a>, which went into effect on July 1, 2024, included a biphasic approach to raising the executive, administrative, and professional\"Adobestock<\/a> (\u201cEAP\u201d) OT exemption salary thresholds.\u00a0 The threshold moved to $844 per week, or $43,888 annually on July 1, and would have escalated to $1,128 per week, or $58,656 annually, on January 1, 2025.\u00a0 The rule also included automatic triennial updates to the threshold.\u00a0 But as President Trump readies to return<\/a> to the White House, the salary threshold for EAP exemptions under the FLSA now reverts to $35,568, the level set during his first term. [1]<\/a><\/p>\n

Judge Jordan\u2019s Memorandum Opinion and Order<\/u><\/strong><\/p>\n

Explaining a court\u2019s role in the context of Loper Bright Enters. v. Raimondo, <\/em>Judge Jordan vacated the rule as an unlawful agency action exceeding departmental authority under the Administrative Procedure Act and remanded it to the U.S. Department of Labor (\u201cDOL\u201d).\u00a0 He provided an extensive treatment of the salary threshold\u2019s history, noting<\/p>\n

the fundamental aspects of the salary-level test have included setting low minimum salary levels designed to exclude only obviously nonexempt employees, premised on wage-data for the lowest-wage region, the smallest-size business establishment group, the smallest-size city group, and the lowest-wage industry, applied by the Department in a manner consistent with serving only the purpose of separating exempt from nonexempt employees, not improving the status of such employees<\/p><\/blockquote>\n

Texas v. DOL<\/em>, 4:24-CV-499, 4:24-CV-468, slip op. at 14 (Nov. 15, 2024, E.D. Tex).\u00a0 He also explored the recent U.S. Court of Appeals for the Fifth Circuit decision in Mayfield v. DOL<\/em>, which was issued in response to a legal challenge to the 2019 DOL Final Rule that increased the minimum salary requirement for the EAP exemption from overtime, and held that:<\/p>\n

[u]sing salary as a proxy for EAP status is a permissible choice because, as we have explained, the link between the job duties identified and salary is strong. \u00a0That does not mean, however, that use of a proxy characteristic will always be a permissible exercise of the power to define and delimit. \u00a0If the proxy characteristic frequently yields different results than the characteristic Congress initially chose, then use of the proxy is not so much defining and delimiting the original statutory terms as replacing them.<\/p><\/blockquote>\n

117 F.4th 611, 619 (5th Cir. 2024).\u00a0 The Fifth Circuit\u2019s Mayfield<\/em> opinion concerned the Trump era overtime rule, so it did not address the new Biden Administration thresholds.\u00a0 Judge Jordan\u2019s opinion took the next step, applying the Court of Appeals\u2019 rationale to invalidate President Biden\u2019s thresholds.\u00a0 His analysis considered three limitations on the DOL\u2019s congressionally-delegated authority to define and delimit the EAP exemptions:<\/p>\n