On April 23, 2024, the U.S. Department of Labor (DOL) released its
Overtime Rule, which raises the minimum salary threshold for employees classified as “exempt” from overtime wages under the white-collar exemptions to the Fair Labor Standards Act (FLSA). AHCA/NCAL provided comments during the open comment period and
developed a summary of the final rule, along with its potential impacts on long term care providers.
Since its release, the DOL's Overtime Rule has faced several legal challenges in federal court. Most recently, on September 11, the court
ruled that the inclusion of a minimum-salary requirement is within the DOL’s explicitly delegated authority to “define and delimit” the terms of the FLSA’s executive, administrative, or professional capacity (EAP) exemption.
What does this mean for the 2024 Overtime Rule? According to a
legal update article from Husch Blackwell, “The Fifth Circuit’s ruling yesterday is binding on the federal district courts in Texas with pending legal challenges involving the 2024 Overtime Rule. In those cases, any argument that the DOL lacks authority to rely on a minimum-salary requirement in determining EAP status will be rejected. However, the courts in those cases must still decide whether the actual 2024 salary threshold increases are valid or whether they effectively eliminate the duties test. They will also need to decide whether the provision in the 2024 Overtime Rule allowing for an automatic increase in the salary threshold every three years is valid.”
What do these legal challenges mean for you as a provider? Employers should continue planning to comply with the next salary threshold increases, which take effect on January 1, 2025. Alternatively, employers should ensure that employees affected by the January 1, 2025, increase do not work more than 40 hours per week.