NEW YORK (AP) — A federal judge in Texas has blocked a up-to-date Biden administration rule that would have expanded access to overtime pay to millions more U.S. workers
On Friday, U.S. District Judge Sean Jordan sided with the state of Texas and a group of business associations that argued the Labor Department exceeded its authority when it adopted — and ruled on — a rule earlier this year to significantly increase overtime pay for employees that the Department could not prioritize employee wages over work duties when determining eligibility.
Under federal law, almost all hourly workers in the United States are entitled to overtime pay after 40 hours per week. However, many employees are exempt from this obligation – unless their income is below a certain level.
The Labor Department’s now-repealed rule would have represented the largest increase in that cap in decades. Starting July 1, employers were required to pay overtime to workers who earn less than $43,888 a year in certain managerial, administrative and professional positions – and that amount is set to rise to $58,656 next year.
The Labor Department estimated that an additional 4 million lower-paid workers would be eligible for overtime protection in the first year of the up-to-date rule. Additionally, an additional 292,900 higher-paid employees were expected to receive overtime entitlements through separate threshold increases.
Now the previous threshold of $35,568, which was set in 2019 under the Trump administration, is set to come into force again.
A Labor Department spokesman did not immediately comment when reached by The Associated Press on Friday. It was unclear whether the department would seek to appeal the decision by Jordan, who was nominated to the seat by Republican President-elect Donald Trump in his first term.
At the time of the rule’s passage in April, Acting Labor Minister Julie Su said the government was “delivering on our promise to raise the bar” – noting that it was “unacceptable” for low-paid workers to do the same work as their colleagues on an hourly basis without additional pay.
After this year’s regulation was passed, legal challenges mounted. A handful of trade groups argued that the move would hurt businesses and result in costs that could potentially require employers to cut jobs or limit their workers’ hours.
David French, executive vice president of government relations at the National Retail Federation — one of the groups that challenged the Labor Department’s rule — claimed in a statement Friday that the changes “impact retailers’ ability to offer the most flexible, generous and tailored offerings.” , “limited benefits packages for lower-level exempt employees across the industry.”
Friday’s verdict is a bit of déjà vu. In 2016, an Obama-era attempt to similarly expand eligibility for overtime pay was ultimately thrown out in court after being opposed by some business leaders and Republican politicians.
The Trump administration later passed a smaller increase, marking the first increase since 2004. Proponents of higher overtime pay stressed that it’s far from enough — arguing that too many employees are still being cheated out of their time — but possible changes under Trump’s upcoming second term are unlikely to meet those demands.
