Did a Federal Court Block the DOL’s 2025 Overtime Salary Threshold Increase Nationwide?
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For employers and salaried workers alike, the Department of Labor’s 2024 overtime rule promised a major shift in who would qualify for overtime pay starting January 1, 2025. But a federal court in Texas ultimately set aside and vacated the rule nationwide, preventing the planned 2025 salary-threshold increase from taking effect and resetting compliance expectations across the country. Below is a case-study summary of State of Texas v. U.S. Department of Labor, the decision frequently described as a “national vacatur” because it did more than block enforcement for a single plaintiff; it invalidated the rule nationwide.
Case: State of Texas v. U.S. Department of Labor
Court: United States District Court, Eastern District of Texas (Sherman Division)
Case No.: Civil No. 4:24-cv-499-SDJ (lead case), consolidated with 4:24-cv-468-SDJ
Decision Date: November 15, 2024
Judge: District Judge Sean D. Jordan
Outcome: The “2024 Rule” was set aside and vacated
The Plaintiff in the Case: The State of Texas
The lead plaintiff was the State of Texas, joined in the consolidated litigation by a coalition of employer and trade-organization plaintiffs challenging the Department of Labor’s overtime rule as exceeding the agency’s statutory authority.
Get to Know the Defendant in the Case: U.S. Department of Labor
The defendant was the U.S. Department of Labor and agency officials responsible for implementing and enforcing the overtime rule (including the Department's leadership and the Wage and Hour Division).
A Brief Case History: State of Texas v. U.S. DOL
In April 2024, the U.S. Department of Labor finalized a rule that revised the salary thresholds for “white-collar” FLSA exemptions for executive, administrative, and professional employees. Under the new rule, a two-step salary threshold increase was implemented alongside an automatic updating mechanism:
On July 1, 2024, salary thresholds increased from $684/week ($35,568/year) to $844/week ($43,888/year)
On January 1, 2025, salary thresholds were scheduled to increase to $1,128/week ($58,656/year)
In addition, highly compensated employees (HCE) were also going to see an increase; with the salary threshold scheduled to rise to $151,164/year on January 1, 2025, and undergo automatic updates beginning in 2027.
Challenging the Rule in Court: Texas v. U.S. DOL
Responding to the new rule affecting salary thresholds for white-collar exemptions under FLSA, Texas filed a lawsuit attempting to stop it before it went into effect. In June 2024, the court issued an injunction preventing the Department from enforcing the rule against Texas as an employer. However, the July 1, 2024 increase continued to apply to other employers nationwide.
The cases were consolidated and proceeded on cross-motions for summary judgment. On November 15, 2024, Judge Jordan granted summary judgment for the plaintiffs and issued a memorandum opinion and order that set aside and vacated the 2024 Rule.
The federal government appealed the ruling to the Fifth Circuit. The dispute remained active into 2025.
What is the Main Question in the Case?
The main question in the case was whether the U.S. Department of Labor exceeded its authority to define and “delimit” the FLSA executive, administrative, and professional exemptions when it issued the 2024 rule raising salary thresholds and adding an automatic updating mechanism.
What Were the Allegations and Arguments in the Case?
The plaintiffs argued that the 2024 rule exceeded the FLSA's limits because it raised the salary level so significantly that it would override the duties-based inquiry Congress wrote into the statute, effectively making exemption status turn primarily on pay level rather than job duties for millions of workers. Additionally, the court had to consider the automatic updating mechanism and arguments that it would unlawfully allow future salary threshold increases without undergoing the notice-and-comment rulemaking process that generally governs such major regulatory changes.
The Court’s Decision: Texas v. U.S. DOL
The court ruled for Texas and the other plaintiffs and held that the Department’s rule exceeded its statutory authority, granting summary judgment and ordering that the 2024 Rule be “set aside and vacated.” Since the rule was vacated, the planned salary threshold for January 1, 2025 did not take effect. The ruling also nullified the prior July 1, 2024 increase, so thresholds reverted to pre-rule status.
What Makes this Wage-and-Hour Decision a Landmark Case?
Although the order was issued in late 2024, its practical impact landed squarely in 2025. The DOL’s rule was designed around a major January 1, 2025, increase in the salary threshold and a new standard for recurring updates. By vacating the rule nationwide, the Court changed the compliance landscape overnight, particularly for employers that had prepared for (or already completed) reclassifications and pay adjustments in anticipation of the 2025 increase scheduled under the 2024 rule.
Just as importantly, the decision is frequently cited for its remedy: rather than limiting relief to the plaintiffs, the court vacated the rule itself—functionally removing it from the books nationwide, at least unless and until it is revived through appellate review or future rulemaking.
FAQ: Texas v. U.S. DOL
Q: What did the DOL’s 2024 overtime rule try to change?
A: It raised the minimum salary level for the executive, administrative, and professional exemptions from $684/week to $844/week (July 1, 2024), then planned to raise it again to $1,128/week on January 1, 2025, and also increased the HCE threshold—plus it added automatic updates beginning in 2027.
Q: What did the court do in State of Texas v. U.S. Department of Labor?
A: The court granted summary judgment for the plaintiffs and ordered that the 2024 Rule be set aside and vacated.
Q: Did the decision only apply in Texas?
A: No. The earlier injunction was limited to Texas as an employer, but the November 15, 2024 order vacated the rule, and it has since been widely understood to apply nationwide.
Q: What salary threshold applied after the rule was vacated?
A: The salary level reverted to $684/week ($35,568/year) for the standard salary threshold, and the HCE threshold reverted to $107,432/year.
Q: Was the decision appealed?
A: Yes. The federal government appealed the ruling to the Fifth Circuit, and the litigation remained active into 2025.
If you believe you were misclassified as exempt, denied overtime, or not paid for all hours worked, the wage-and-hour attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP can help assess your potential claims and explain your options under federal and state law. Contact the firm’s offices in Los Angeles, San Diego, San Francisco, Sacramento, Riverside, or Chicago to discuss how you may be able to pursue unpaid wages and accountability.
