A federal judge in Texas on Friday permanently blocked a Biden administration rule that would have made nearly 4 million more salaried American workers eligible for overtime pay.
US District Judge Sean Jordan in Sherman, Texas said labor department rules Which took effect in July, improperly based eligibility for overtime pay on workers’ wages rather than their job duties.
The state of Texas and business groups representing several industries filed lawsuits challenging the rule, which was consolidated.
Jordan, who was appointed by Republican President-elect Donald Trump in his first term, rescinded the rule in June after saying it was potentially invalid and temporarily barred it from applying to Texas state employees. Was given.
The rule would require employers to pay overtime premiums to salaried employees who make less than $1,128 a week, or about $58,600 a year, when they work more than 40 hours a week, beginning Jan. 1, 2025, and It was extended temporarily. On July 1, the limit became approximately $44,000 per year.
The previous limit of approximately $35,500, which was set in 2019, will now go back into effect.
The Labor Department and the office of Republican Texas Attorney General Ken Paxton did not immediately respond to requests for comment.
David French, executive vice president of the National Retail Federation, one of the groups that filed the lawsuit, said the rule would reduce retailers’ ability to offer more benefits to lower-level salaried employees.
The Labor Department may seek review of the ruling in the New Orleans-based 5th U.S. Circuit Court of Appeals, widely considered the most conservative federal appeals court. But the incoming Trump administration may abandon any efforts to revive the rule.
Federal law exempts workers with “executive, administrative and professional” (EAP) duties from receiving overtime pay, and the Department of Labor has for decades used salary as a factor in determining when it applies.
The Labor Department adopted the rule, saying that low-paid salaried employees often perform the same amount of work as hourly employees, but work more hours without any additional pay. The rule also established an automatic increase in the salary range every three years to reflect salary increases.
Jordan agreed with Texas and business groups on Friday that by significantly increasing the wage level, the rule improperly removed the duty requirement written into federal law.
“The Department may impose certain limitations on the scope of the operating conditions of the EAP waiver, but it cannot promulgate regulations that replace or swallow those conditions,” Jordan wrote.
