The District Court for the Eastern District of Texas has decided to block the US Department of Labor’s (DOL) 2024 overtime final rule.
The ruling reverts the minimum salary threshold for overtime pay eligibility under the Fair Labor Standards Act to previous levels.
The overturned rule, finalised on 23 April 2024 and effective from 1 July, would have increased the minimum annual salary threshold from $35,568 to $43,888, with a further increase to $58,656 scheduled for 1 January 2025.
As a result of the ruling, the minimum salary threshold for overtime exemption remains at $35,568, with the highly compensated employee threshold set at $107,432.
The court's ruling deemed that the new threshold "effectively eliminates" the assessment of an employee's duties and relied solely on a salary-based test.
In response to the reversal, the National Grocers Association (NGA) president and CEO Greg Ferrara said: “The court’s decision restores a more balanced and practical approach to overtime rules, ensuring that small businesses, including independent community grocers, can continue to thrive without the undue burdens imposed by the 2024 rule.”
The provision for automatic updates to the salary threshold every three years was also struck down due to violations of notice-and-comment requirements under the Administrative Procedure Act.
The NGA emphasised its commitment to advocating for fair labour policies that support independent grocers' growth and sustainability in the US.
“The independent supermarket industry is a cornerstone of America’s economy, providing nearly one million jobs nationwide. NGA members take pride in being employers of choice within their communities, offering stable jobs and pathways for career growth,” Ferrara added.
In addition to NGA, the National Retail Federation (NRF) also welcomed the ruling of the US District Court in the Eastern District of Texas.
NRF government relations executive vice-president David French said: “NRF appreciates the court concurring with our arguments that the Labor Department exceeded its legal authority in promulgating rules clearly inconsistent with the Fair Labor Standards Act."
