A federal judge in Texas has issued a ruling blocking a new rule from the Biden administration that aimed to expand access to overtime pay for millions of salaried workers in the United States. The ruling, made by U.S. District Judge Sean Jordan, came in response to a challenge brought by the state of Texas and a group of business organizations.
The rule, finalized earlier this year by the Labor Department, sought to significantly increase federal overtime eligibility for salaried workers. Under the now-blocked rule, salaried workers in certain executive, administrative, and professional roles making less than $43,888 a year would have been entitled to overtime pay starting July 1, with the threshold set to rise to $58,656 next year.
The Labor Department estimated that approximately 4 million lower-paid salary workers would have become eligible for overtime protections in the first year under the new rule, with an additional 292,900 higher-compensated workers also expected to gain overtime entitlements through separate threshold increases.
With the judge's ruling, the previous threshold of $35,568 set in 2019 under the Trump administration is set to go back into effect. The Labor Department has not yet provided a comment on the ruling.
Acting Secretary of Labor Julie Su had previously stated that the administration was committed to raising the bar on overtime pay, emphasizing the importance of fair compensation for lower-paid salaried workers who perform similar duties to their hourly counterparts without additional pay.
Legal challenges to the rule emerged following its finalization in April, with some trade groups arguing that the expansion of overtime pay eligibility would impose financial burdens on businesses, potentially leading to job cuts or reduced work hours for employees.
This is not the first time an overtime pay expansion effort has faced legal setbacks. In 2016, a similar Obama-era initiative to expand overtime pay eligibility was also struck down in court amid opposition from business leaders and Republican politicians.
