U.S. federal court overturns overtime rule, keeps lower thresholds

THE U.S. DISTRICT Court for the Eastern District of Texas on Nov. 15 struck down the Department of Labor’s rule raising salary thresholds for overtime
exemption under the Fair Labor Standards Act. The ruling vacates increases from $35,568 to $43,888 on July 1, with a planned rise to $58,656 by Jan. 1, 2025.

Hotel associations, including AAHOA and the American Hotel & Lodging Association, welcomed the decision.

U.S. District Judge Sean Jordan in Sherman, Texas, ruled that the 2024 rule “effectively eliminates” the evaluation of an employee’s duties in favor of
a “salary-only test” and that automatic threshold updates every three years violate federal rulemaking requirements.

Jordan, appointed by President Donald Trump, emphasized the rule’s overreach.