12 . 04 . 24      |     Published by the Arkansas Baptist News

On November 15, 2024, a federal judge in Texas struck down the Department of Labor’s new overtime exemption rule, which had significantly increased the minimum salary threshold for exempt employees under the Fair Labor Standards Act. My article detailing the now overturned rule can be found here.

The overturned rule, which began implementation in July 2024, raised the minimum salary for overtime exemption from $684 per week ($35,568 annually) to $844 per week ($43,888 annually), with plans to increase further to $1,128 per week ($58,656 annually) in January 2025. The court ruled that the DOL overstepped its authority by placing excessive emphasis on salary levels rather than job duties to determine exemption status, violating the original intent of the FLSA. This decision aligns with past rulings that have similarly invalidated significant salary-based thresholds.

This means that, on the federal level at least, the minimum salary required for an employee to be exempt from overtime pay reverts to the threshold set in 2019- $684 per week ($35,568 annually). The Department of Labor has the option to appeal the ruling, but it is unclear if that will happen or happen with any success.

For church and ministry leaders, it will now be a discussion of whether you should stick to any payroll or policy changes made or roll back those changes. There is the potential for a morale issue if a raise, or the opportunity for overtime pay, was communicated to an employee, which could now be rolled back. But, on the contrary, there is the potential for a morale boost for an employee whose pay would have stayed unchanged and who now does not have to track their work hours.

If you have questions, our team at the Arkansas Baptist Foundation is happy to be a resource.

The information contained in this article does not constitute legal and/or tax advice. The reader should consult qualified legal and/or tax counsel to determine how laws apply to specific situations.

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