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On June 28, a federal judge in Texas issued a temporary block against a Biden administration rule set to expand mandatory overtime pay to 4 million salaried U.S. workers. U.S. District Judge Sean Jordan, based in Sherman, Texas, ruled that the U.S. Department of Labor’s regulation improperly determines overtime eligibility based on salary rather than job duties.
Judge Jordan, appointed by former President Donald Trump, prevented the implementation of the rule for state workers in Texas as a legal challenge progresses. The Texas Attorney General’s office and the Department of Labor have yet to comment on the decision. The ruling could be reviewed by the 5th U.S. Circuit Court of Appeals in New Orleans, known for its conservative leanings.
The rule, introduced in April, mandates that salaried employees earning less than $1,128 per week, or approximately $58,600 annually, must receive overtime pay for hours worked beyond 40 per week. This update raises the previous threshold from about $35,500, established in 2019. Traditionally, federal law exempts employees with “executive, administrative, and professional” (EAP) duties from overtime, with salary being one of several factors considered.
The Labor Department argued that lower-paid salaried employees often perform similar tasks to hourly workers but without additional compensation for extra hours. The rule also proposes automatic updates to the salary threshold every three years to match wage increases.
Texas contends that the rule violates federal law by focusing primarily on pay instead of job duties for overtime exemptions. The state argues that this infringes on their constitutional right to manage state employee compensation and budget allocations. Judge Jordan agreed, stating that the rule effectively alters federal law by emphasizing salary over duties in the EAP Exemption.
The judge is also overseeing a separate challenge to the rule from business groups, and a small marketing firm has filed a lawsuit against the regulation in another federal court in Texas.
