On November 15, the U.S. District Court for the Eastern District of Texas vacated the Biden administration’s overtime final rule in its entirety. The judge explained that while the Department has authority to define and delimit the overtime exemption’s terms, “that authority ‘is not unbounded.'” He said the rule’s minimum salary level “effectively eliminates” consideration of an employee’s duties “in favor of what amounts to a salary-only test.” He also invalidated the Department’s effort to implement automatic updates to the minimum salary and highly compensated employee (HCE) thresholds, which “violates the notice-and-comment rulemaking requirements of the [Administrative Procedure Act].”

The rule, therefore, is vacated. The minimum salary threshold is once again set to $35,568, and the threshold for highly compensated employees is set to $107,432.

This is a major win for the regulated community and for the millions of workers who would have lost their workplace status because of this misguided rule.