Search Travel Market Report

mainlogo
www.travelmarketreport.com
U.S.A.
English
Canada
English
Canada Quebec
Français
  • News
  • Packaged Travel
  • Cruise
  • Hotels & Resorts
  • Destinations
  • Retail Strategies
  • Air
  • Training & Resources
  • Luxury Travel Report

Federal Court Invalidates Department of Labor’s 2024 Overtime Rules

by Paul Ruden  November 20, 2024
U.S. Department of Labor building in Washington D.C.

U.S. Department of Labor building in D.C. Photo: JHVEPhoto / Shutterstock.com

The United States District Court for the Eastern District of Texas has struck down the U.S. Department of Labor’s (DOL) final rules redefining which employees qualify as exempt from overtime pay under the executive, administrative, and professional (EAP) employee categories. The ruling applies nationwide, reverting the criteria for EAP employees to those in effect before the 2024 rule was adopted.

Overview of the 2024 Rule

The 2024 rule introduced three key changes to the EAP exemption under the Fair Labor Standards Act (FLSA), each involving increases to the minimum salary threshold for exemption.

1. July 1, 2024: The salary threshold increased from $684 per week to $844 per week.
2. Highly Compensated Employees (HCEs): Adjusted compensation rules were introduced.
3. January 1, 2025: A further increase to $1,128 per week was planned, alongside automatic salary adjustments every three years.

Court’s Decision

The court found the rule improperly emphasized salary over job duties, contrary to congressional intent. Specifically, the court ruled the $844-per-week threshold, effective July 1, 2024, as invalid, noting that it “rendered about one million employees nonexempt who were previously exempt, with no change in their duties.”

This decision also invalidated the planned January 2025 salary increase and the three-year automatic adjustment provision.

Implications for Employers

Effective immediately, as of November 15, 2024, the salary threshold for EAP exemptions reverts to the pre-2024 rule levels:

  • EAP employees: $684 per week ($35,568 annually).
  • Highly Compensated Employees: $107,432 annually.

The ruling raises unresolved questions about salary and overtime payments made between July 1 and November 15, 2024, under the now-invalidated rules. For example:

  • Overtime payments: Employees newly classified as nonexempt may have received overtime pay they were not entitled to under the pre-2024 rules. Recovery of those amounts by employers is unlikely.
  • Salary adjustments: Employers who raised salaries to maintain exempt status are unlikely to rescind those increases.

Employers are advised to consult legal counsel before making any changes to compensation or employee classification.

Impact on Future Rulemaking

The court’s decision casts doubt on the likelihood of an appeal. Observers believe the DOL, under the Trump administration, is unlikely to pursue a similar EAP rulemaking approach in the near term.

This decision does not affect states, such as New York and California, which maintain higher minimum salary thresholds for exemption than federal law requires.

ASTA responds

ASTA called the news a “significant legal victory” for its members and the whole industry. ASTA had strongly opposed the rule during the draft phase and submitted comments about what impact it could have on agencies.

In its submission, Senior Vice President & General Counsel, Peter Lobasso, also expressed doubt that DOL had “the statutory authority to affect… updates to the salary level outside of the notice-and-comment rulemaking process prescribed under the Administrative Procedure Act.”

  
  
Related Articles
Delta Air Lines Clarifies Schedule Change Policy for Travel Agencies
ASTA Celebrates Defeat of Nebraska Sales Tax Bill
ACTA: Impact of U.S. Tariffs on Canada’s Travel Industry Will Be Worse Than Pandemic
American Airlines Revisits NDC Misstep at ASTA’s Annual TAC
ASTA TAC News and Notes: Hotel Commission Delays, Jackie Friedman Bids Farewell
Sandals’ Gary Sadler to Advisors: “You Are the Most Important Part of Our Business”
Casto Travel Rebrands as Casto, an “Anti-BPO” Solution for Travel Agencies
ASTA Supports Extension of Key Tax Provision for Small Business Owners
ASTA Elects New Board of Directors
How One Travel Advisor Gives Back to the Industry through ASTA Chapter Advocacy  

MOST VIEWED

  1. U.S. Issues Worldwide Travel Warning for All Americans Traveling Abroad
  2. Travel Leaders Network President John Lovell to Depart for Cruise Role
  3. Hilton Rewards Reservations Canceled Amid Transition of Playa Hotels to Hyatt
  4. Ask-an-Advisor: How Do I Know When It’s Time to Fire a Client?
  5. Here Are All the New Cruise Ships Coming in 2026, 2027, and Beyond
  6. U.S. and International Airlines Halt Dubai, Mideast Flights Due to Iran-Israel Conflict


  1. Overtourism Backlash Heats Up in Europe as Summer Season Kicks Off
  2. New Greece Cruise Passenger Tax Coming this July
  3. What Does Success Look Like for a Travel Advisor?
  4. New U.S. Travel Bans Would Hinder Tourism, Industry Leaders Say
  5. The Travel Corporation Overhauls Structure and Sales Team
  6. Carnival Cruise Line to Launch ‘Carnival Rewards’ Loyalty Program
TMR Subscription

Subscribe today to receive daily in-depth luxury coverage, analysis of luxury news, luxury trends and issues that affect how you do business. Subscribe now for free.

Subscribe to TMR

Top Stories
Headquarter Happenings: Gifted Travel Network Hosts 3rd Annual Symposium on Avalon Poetry II
Headquarter Happenings: Gifted Travel Network Hosts 3rd Annual Symposium on Avalon Poetry II

GTN is keeping its momentum going in the luxury space by offering coaching and partnership opportunities to its advisors.

The Top 11 Hottest Adventure Tours of 2025 (So Far)
The Top 11 Hottest Adventure Tours of 2025 (So Far)

Top tour operators talk their best-selling products for 2025.

4 Qualifying Questions Travel Advisors Should Ask Clients with Autism
4 Qualifying Questions Travel Advisors Should Ask Clients with Autism

Advice for selling accessible travel to neurodivergent customers, from the experts.

Gifted Travel Network on Trevello Deal: ‘Philosophy Was So Aligned’
Gifted Travel Network on Trevello Deal: ‘Philosophy Was So Aligned’

Though GTN was not looking for a buyer, Trevello’s new compensation model and common ideals helped seal the deal.

Travel Guard Releases Enhanced Self-Service Tool for Travel Advisors
Travel Guard Releases Enhanced Self-Service Tool for Travel Advisors

The enhanced version features a more intuitive, self-service experience.

InteleTravel Acquires Tickitto, Adding Ticketed Events & Experiences to Brand Portfolio
InteleTravel Acquires Tickitto, Adding Ticketed Events & Experiences to Brand Portfolio

The acquisition gives advisors booking access to tickets for concerts, NFL games, F1 races, and more.

TMR OUTLOOKS & WHITE PAPERS
View All
Advertiser's Voice
The Collette Premium Experience
About Travel Market Report Mission Meet the Team Advisory Board Advertise Syndication Guidelines
TMR Resources Calendar of Events Outlook/Whitepapers Previous Sponsored Articles Previous This Week Articles
Subscribe to TMR
Select Language
Do You Have an Idea Email
editor@travelmarketreport.com
Give Us a Call
1-(516) 730-3097
Drop Us a Note
Travel Market Report
71 Audrey Ave, Oyster Bay, NY 11771
© 2005 - 2025 Travel Market Report, an American Marketing Group Inc. Company All Rights Reserved | Terms and Conditions
Cookie Policy Privacy Policy Manage cookie preferences