Federal Judge Invalidates Federal Overtime Salary Threshold Increase

Last Friday, a federal district judge invalidated the Labor Department's overtime rule. The ruling applies to the higher salary level test that went into effect this past July, and blocks the next change set for January 1, 2025. He also invalidated the federal government's proposed automatic increases (scheduled for every three years).

While it's possible for the Biden administration to appeal the decision, the incoming Trump administration would then need to continue the appeal (and win it) in order for the decision to be reversed.

What does it mean?

The ruling not only means that the January 1, 2025 increase in the salary threshold will not go into effect, but also that the July 1, 2024 increase in the salary threshold is retroactively set aside, so the federal salary threshold returns to the 2019 level of $35,568 per year ($684 per week). For most of the country, that's the end of the story. In Maine (and some other states), there's a little more to it than that.

In Maine - this means that we revert back to the state overtime law, which exceeds the federal standard. Remember: you must always be in compliance with both state and federal labor laws. If one is more strict than the other (or in this case, if one has a higher salary threshold), you must follow the one which is more strict / higher. In Maine, we revert back to the 2024 overtime salary threshold of $42,450.20 (for the next month and a half). 

Maine's minimum wage is updated annually, and the overtime salary threshold is tied to the minimum wage. Therefore, starting January 1, 2025 the new minimum salary threshold in Maine will be $845.21 per week, or $43,951 per year. (See Maine Department of Labor Announcement here.)

It's also possible (perhaps even likely) that the Maine legislature will propose an increase to the salary threshold.

Am I Having Deja Vu?

Some may remember something similar playing out in 2016/2017. President Obama proposed an increase to the salary threshold and a federal judge invalidated it. His administration appealed the decision, but President Trump's administration declined to continue the appeal, so the decision stood.

It's likely that the same pattern will replay this time, though we will keep you updated when and if anything changes.