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In a significant victory for the restaurant industry, a federal court in Texas has struck down the Department of Labor’s (DOL) 2024 Overtime Rule. This decision prevents sweeping changes to salary thresholds that could have financially burdened businesses nationwide. The Restaurant Law Center and the Texas Restaurant Association, with Angelo Amador as co-counsel, spearheaded the legal challenge.

The court found that the DOL exceeded its authority by prioritizing salary thresholds over job duties, as outlined in the Fair Labor Standards Act (FLSA). Key highlights include:

• The salary threshold reverts to $35,568/year ($684/week) and $107,432/year for highly compensated employees.
• Automatic salary updates every three years were invalidated for failing to meet Administrative Procedure Act requirements.
• The court emphasized the FLSA’s duties test over salary levels, echoing a similar 2016 ruling.

This ruling provides relief for restaurant owners who were preparing for the threshold increase to $44,000 in 2024 and $59,000 in 2025. With the Biden administration nearing its end, an appeal is unlikely, and the incoming Trump administration is expected to abandon the rule altogether or issue a scaled-back version.

However, businesses must stay vigilant. Some states, including California, Colorado, and New York, have higher salary thresholds that remain in effect. Employers should review local regulations and evaluate current compliance plans.

A key benefit of Louisiana Restaurant Association (LRA) membership is access to the LRA General Counsel for Employment and Labor. Contact the LRA today to connect with expert guidance and ensure your business remains compliant in this evolving regulatory landscape.