Labor & Employment Developments Blog

Classifying a worker as an independent contractor rather than an employee can be one of the more complicated—and risky—decisions an employer can make, as misclassification can lead to serious legal and financial consequences. Once again, however, the proper standard for classifying a worker under the Fair Labor Standards Act (“FLSA”) is in flux.

On November 15, 2024, the US District Court for the Eastern District of Texas overturned the Department of Labor’s (DOL) final rule which increased the salary threshold for workers to be exempt from overtime requirements.

The Department of Labor (DOL) announced on April 23, 2024, a final rule that expands the compensation threshold for exemption eligibility under the Fair Labor Standards Act (FLSA). On July 1, 2024, most salaried workers who earn less than $43,888 per year will become eligible for overtime pay under the final rule, which increases the salary threshold from $35,568 to $43,888 per year. This threshold will increase again on January 1, 2025 to $58,656 per year.