NEW YORK (AP) — A federal judge in Texas has blocked a new Biden administration rule that would have expanded access to overtime pay to millions of additional U.S. workers.
In a ruling Friday, U.S. District Judge Sean Jordan sided with the state of Texas and a group of business organizations that argued the Labor Department exceeded its authority when it finalized a rule earlier this year to significantly expand workers’ federal overtime eligibility.
Under federal law, almost all hourly workers in the U.S. are entitled to overtime after 40 hours per week. But many workers are exempt from that requirement unless they earn below a certain level.
The now abolished rule of the Ministry of Labor would have meant the largest increase in that ceiling in decades. Employers were required to pay overtime to workers making less than $43,888 a year in certain managerial, administrative and professional positions starting July 1 — and that would increase to $58,656 next year.
The Department of Labor estimated that under the new rule, an additional 4 million lower-wage workers would qualify for overtime protections in the first year. An additional 292,900 more highly compensated employees were expected to gain overtime rights through separate threshold increases.
Now the previous threshold of $35,568 – set in 2019 under the Trump administration – is about to go back into effect.
A Labor Department spokesman did not immediately comment when reached by The Associated Press on Friday.
When the rule was finalized in April, acting Labor Minister Julie Su said the government was “keeping our promise to raise the bar” – noting it was “unacceptable” for lower-paid workers to do the same. job as their hourly counterparts, without extra pay.
Legal issues bubbled up after this year’s rule was finalized. A handful of trade groups argued that the move would hurt businesses and lead to costs that could require employers to cut jobs or limit their workers’ hours.
This is not the first time an overtime pay increase has been rejected by the court. In 2016, an Obama-era effort to similarly expand overtime eligibility was ultimately rejected by the court after resistance from some business leaders and Republican politicians.
