Alexandria, V.A., November 19, 2024 — The American Society of Travel Advisors (ASTA) welcomes a significant legal victory for its members and the broader travel community. On November 15, 2024, the federal district court hearing the case of State of Texas v. U.S. Department of Labor, et al. issued an order invalidating the Department of Labor’s (DOL) final rule on overtime, stating that the agency exceeded its authority in issuing the rule.
ASTA strongly opposed the rule during the draft phase, submitting comments to underscore its potentially detrimental impact on travel agencies, particularly small businesses. 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.” The court’s decision therefore marks a critical win for the association and the businesses it represents.
The case was one of three actions brought in the federal courts challenging the validity of the rule which increased the minimum salary for exempt workers to $43,888 beginning on July 1, 2024. The final rule, announced on April 23, would have implemented a further salary increase to $58,656, effective January 1, 2025, and automatic updates every three years beginning in 2027. In light of the court’s ruling, the minimum salary threshold for overtime-exempt workers reverts to the 2019 level of $35,568, while the threshold for highly compensated employees returns to $107,432.
ASTA members may recall that the court in the same case previously issued a preliminary injunction on June 28, but that the injunction was very limited in scope, and did not decide the merits of the plaintiff’s arguments as to the DOL’s rulemaking authority. As such, that earlier action had little, if any, effect on ASTA member agencies. This decision, however, will be applicable to all travel agencies.
The Biden administration may elect to appeal the decision to the Fifth Circuit; however, it is highly unlikely that the incoming Trump administration would be inclined to continue to defend the rule. This is precisely what happened to an Obama-era DOL rulemaking from 2016 that was similarly invalidated.
ASTA will closely monitor the status of the case and provide timely updates to its members. For now, the association celebrates this development as a victory for travel businesses of all sizes.
