SHERMAN, Texas — A significant decision emerged from a Texas federal court on Friday, where a judge permanently blocked the implementation of a Biden administration rule that aimed to extend overtime pay eligibility to an additional 4 million salaried U.S. workers. U.S. District Judge Sean Jordan ruled that the measure, initiated by the U.S. Department of Labor and set to take effect in July, incorrectly prioritized workers’ salaries over their job duties in determining eligibility for overtime compensation.
The contentious rule had sparked legal challenges from the state of Texas and various business organizations across multiple industries, resulting in a consolidated lawsuit. Appointed by then-Republican President-elect Donald Trump, Judge Jordan first signaled potential issues with the legality of the rule in June when he temporarily restrained its application to state employees in Texas.
Under the now-blocked rule, salaried workers earning less than $1,128 per week, or approximately $58,600 annually, would have been entitled to overtime pay for hours worked beyond the standard 40-hour workweek, starting from January 1, 2025. An interim increase had already boosted the threshold to about $44,000 annually as of July 1 this year. This change was in comparison to the previous salary threshold of approximately $35,500 established in 2019, which will remain in effect following the judge’s ruling.
Both the Labor Department and the Texas Attorney General’s office, led by Republican Ken Paxton, had not responded to inquiries for comments at the time of reporting.
Critics of the rule, such as David French, the executive vice president of the National Retail Federation, argued that the changes would have restricted the ability of retailers to enhance benefits for lower-level salaried staff. The business community largely viewed the regulation as a hindrance to operational flexibility and financial planning.
While the Department of Labor might consider appealing the decision at the New Orleans-based 5th U.S. Circuit Court of Appeals – a court known for its conservative leanings – the impending Trump administration may choose not to pursue any further action on the rule.
Federal regulations have long exempted workers performing specific “executive, administrative, and professional” (EAP) roles from overtime pay. Historically, salary levels have played a role in determining these exemptions. However, the Labor Department’s recent rule aimed to adjust this framework by establishing automatic increases in the salary threshold every three years, reflecting overall wage growth. Proponents of the rule argued that this would better align compensation with the evolving economic landscape, claiming that the lower-paid salaried workers frequently undertake the same tasks as their hourly counterparts but without additional remuneration.
In his decision, Judge Jordan sided with the state of Texas and the challenging business groups, ruling that the substantial elevation of the salary threshold effectively bypassed the established job duties criterion mandated by federal law.
As the implications of this legal decision continue to unfold, employers and workers alike are urged to stay informed about developments that could impact compensation structures and labor practices nationally. This article was automatically written by Open AI, and it may contain inaccuracies in people, facts, circumstances, and the story. Any concerns or requests for article removal, retraction, or correction can be directed to contact@publiclawlibrary.org.