A federal judge in Texas has issued a temporary block on a Biden administration rule that would have extended mandatory overtime pay to approximately 4 million salaried workers across the United States. U.S. District Judge Sean Jordan, based in Sherman, Texas, halted the implementation of the rule just days before it was set to take effect on Monday.
Judge Jordan, who was appointed by former Republican President Donald Trump, ruled that the U.S. Department of Labor’s regulation improperly determines eligibility for overtime pay based on workers’ salaries rather than their job responsibilities. This decision came in response to a legal challenge filed by the Republican-led state of Texas, preventing the Labor Department from enforcing the rule specifically for state workers in Texas until further legal proceedings resolve the matter.
The Labor Department and the office of Texas Attorney General Ken Paxton, both Republicans, did not immediately comment on the judge’s ruling. However, the department has the option to appeal Judge Jordan’s decision to the New Orleans-based 5th U.S. Circuit Court of Appeals, known for its conservative leaning.
The rule, finalized by the Biden administration in April, would have required employers to pay overtime premiums to salaried workers earning less than $1,128 per week (approximately $58,600 annually) when they work more than 40 hours in a week. This threshold represents an increase from the previous level of about $35,500 set in 2019.
Under federal law, workers with “executive, administrative, and professional” (EAP) duties are exempt from receiving overtime pay, traditionally determined partly by their salary levels. The Labor Department justified the rule by stating that lower-paid salaried workers often perform the same duties as hourly employees but without additional compensation for overtime hours worked. Additionally, the regulation includes provisions for automatic increases in the salary threshold every three years to keep pace with wage growth.
Texas argued in its lawsuit that the rule violates federal law by primarily linking overtime exemptions to workers’ pay rather than their job duties, seeking to invalidate it nationwide. The state further contended that subjecting states to the expansion of overtime pay rules infringes on their constitutional rights to manage the compensation of state employees and allocate budgetary resources.
Judge Jordan agreed with Texas’s argument, stating that the Labor Department had exceeded its authority by effectively rewriting federal law through the 2024 rule. “Since the ordinary meaning of the EAP Exemption focuses solely on duties, any rule implementing the EAP Exemption – including the 2024 Rule — must likewise center on duties,” Jordan wrote in his decision.
Apart from Texas’s legal challenge, business groups and a small marketing firm have also filed separate lawsuits against the rule in different federal courts in Texas, highlighting widespread opposition and legal scrutiny facing the Biden administration’s policy change on overtime pay.