The U.S. Department of Labor’s (DOL) scheduled January 2025 increase in salary thresholds for executive, administrative, professional and highly-compensated exempt employees were struck down by a federal district court in Texas on November 15, 2024. The decision applies nationwide and not just in Texas. The court found that the DOL exceeded its authority by raising the salary threshold for these “white-collar” exemptions. As a result, the salary thresholds for the white-collar exemptions return to pre-July 2024 levels, or $35,568 for executive, administrative, and professional employees and $107,432 for highly compensated employees. The DOL may appeal this ruling, however, with a new incoming President, the future of this rule is uncertain.

Due to this uncertainty, employers can consider the following options:

1. If you have not increased salaries yet, you may wait until further certainty or clarification by the DOL is provided. If employees were expecting a salary increase in January 2025, you could inform employees that given the court’s decision, salary changes will be delayed, and the company will make salary adjustments when it is appropriate to do so.
2. If you have already increased salaries, while it is permissible to decrease them to align with the lower exempt salary thresholds, doing so could significantly impact employee morale. If you do decide to reduce employees’ salaries, note that under Hawaii Revised Statutes section 388-7(2), employers must provide advance written notice of the salary changes to employees.

HEC will continue to monitor this situation and provide updates as appropriate. If you have questions, members can contact their Human Resources Consultant for assistance.

Please note the information provided is for informational purposes only and may not reflect the most current regulatory developments.  We strive to keep our materials up to date, but there may be occasions when information becomes outdated.  Users are encouraged to verify the applicability of the content before relying on it for decision-making.  If you have any questions or concerns regarding the accuracy or relevance of the information, please contact us directly for assistance.