A federal judge in Texas has blocked a Biden administration rule on overtime pay. The rule, which aimed to extend overtime pay to more workers, was challenged by several business groups and states, including Texas. They argued that the rule would increase labor costs and burden businesses. The court's decision is seen as a setback for the Biden administration's efforts to expand worker protections and ensure fair compensation for overtime work.
According to Reuters, U.S. District Judge Sean Jordan in Sherman, Texas, ruled that the U.S. Department of Labor's upcoming rule, scheduled to take effect on Monday, incorrectly determines eligibility for overtime pay based on workers' wages rather than their job responsibilities.
Under the blocked rule, salaried workers earning less than a certain threshold would have been eligible for overtime pay when working more than 40 hours a week. Proponents of the rule argued it would ensure fair wages for millions of workers who currently do not receive overtime pay due to outdated salary thresholds.
Sean Jordan, appointed by former Republican President Donald Trump, has issued a block preventing the Labor Department from enforcing the rule on state workers in Texas. This block remains in effect until the legal challenge by the Republican-led state is resolved. The Department of Labor has the option to appeal the ruling to the 5th U.S. Circuit Court of Appeals in New Orleans, known for its conservative stance.
The court's injunction means the current overtime pay standards remain in place while the case proceeds through the legal system. The Biden administration may choose to appeal the decision, seeking to reinstate the rule and extend overtime protections to a larger segment of the workforce.
The rule implemented in April would mandate that employers pay overtime premiums to salaried employees earning less than $1,128 per week, approximately $58,600 annually, if they work more than 40 hours per week. The current set of rules dictating overtime pay for salary workers state that anyone making $35,500 or less per year must be paid time-and-a-half for any amount of hours worked over 40 in a regular work week.
Those rules were updated in 2020 by then-President Trump. Previously, the salary threshold was $23,660.
The Biden administration's new rules propose increasing the salary threshold to $43,888 by July 1 and further to $58,656 by January 1, 2025.
This isn't the first instance where a judge from North Texas has sought to block a federal overtime wages rule. Back in 2016, during the Obama administration, a similar plan aiming to raise the salary threshold to $47,476 prompted Texas Attorney General Paxton to file a lawsuit against the government within a few months.
