The U.S. Court of Appeals for the Fifth Circuit will review the Department of Labor's 2024 overtime rule, months after a federal judge in Texas blocked the regulation nationwide. The appeal puts the fate of the rule's expanded salary thresholds — and the exemption status of millions of white-collar workers — back before a court that has already shown skepticism toward DOL's rulemaking approach.

The rule at issue raised the minimum salary for the Fair Labor Standards Act's executive, administrative and professional exemptions in two steps: to $43,888 on July 1, 2024, and to $58,656 on January 1, 2025. It also built in automatic updates every three years. Judge Sean Jordan of the U.S. District Court for the Eastern District of Texas vacated the rule on November 15, 2024, in State of Texas v. DOL, holding that the department had exceeded its statutory authority by relying so heavily on a salary-level test.

For employers, the practical question is what to do now.

What did the vacatur actually change?

The November ruling returned the standard salary level to $35,568 — the figure set in 2019, roughly $684 per week. The higher $43,888 threshold that had briefly been in force between July and November 2024 no longer applies. Employers who reclassified workers as overtime-eligible in mid-2024, then reversed course after the vacatur, have already absorbed the administrative cost of two transitions.

The highly compensated employee threshold also reverted, from the rule's $107,432 to the 2019 level of $107,432 for the standard HCE test as applied before the 2024 changes.

What does the appeal mean for compliance planning?

The Fifth Circuit's docketing of the case means the legal question — whether salary level alone can define exemption status — remains unsettled. Employers operating in the Fifth Circuit's territory (Texas, Louisiana and Mississippi) and nationwide should treat the current $35,568 level as the operative floor while the appeal proceeds.

Three planning points follow:

• Salary structures: Budget scenarios at both $35,568 and $58,656. A reinstated rule would raise the exemption floor by roughly two-thirds inside six months of any ruling.
• Job descriptions and duties tests: The vacatur rested on the salary test's dominance, not the duties test. Classification audits remain worthwhile regardless of outcome.
• State law overlay: California, New York, Washington and several other states set their own, higher salary thresholds. The federal litigation does not disturb those obligations.

How long until a decision?

Appellate timelines are unpredictable, but Fifth Circuit briefing in comparable employment cases has typically run six months to a year. A decision in 2025 is plausible; the losing side could then seek Supreme Court review. Under the Congressional Review Act, Congress could also act, though no disapproval resolution targeting this rule has advanced.

A second consideration sits alongside the appeal: the department itself could withdraw or revise the rule, a step that would moot portions of the case. Until the Fifth Circuit rules — or DOL changes course — the operative federal salary threshold stays at $35,568, and the classifications employers settled on after November 15, 2024, remain the compliance baseline.