Wed. Jul 17th, 2024

A federal judge in Texas temporarily halted a Biden administration rule on Friday that aimed to extend mandatory overtime pay to 4 million salaried U.S. workers.

U.S. District Judge Sean Jordan in Sherman, Texas, ruled that the new U.S. Department of Labor regulation, which was scheduled to take effect on Monday, improperly determined overtime eligibility based on workers’ wages rather than their job duties.

Judge Jordan, appointed by Republican former President Donald Trump, issued the injunction to prevent the Labor Department from enforcing the rule on state employees in Texas while a legal challenge led by the Republican-controlled state is pending.

Both the Labor Department and the office of Republican Texas Attorney General Ken Paxton did not immediately respond to requests for comment.

The Labor Department has the option to appeal the decision to the 5th U.S. Circuit Court of Appeals in New Orleans, known for its conservative leanings.

The rule, which was finalized in April, would mandate overtime pay for salaried workers earning less than $1,128 per week (around $58,600 annually) if they work more than 40 hours a week. The current threshold, set in 2019, is approximately $35,500.

Under federal law, workers with “executive, administrative, and professional” (EAP) roles are exempt from overtime pay, and the Labor Department has historically used salary as one criterion to determine when this exemption applies.

The department argued that many lower-paid salaried workers perform the same tasks as their hourly counterparts but work additional hours without extra pay. The new rule also includes provisions for automatic adjustments to the salary threshold every three years to account for wage growth.

In its lawsuit, Texas contended that the rule violated federal law by prioritizing workers’ salaries over their job responsibilities in determining overtime exemptions.

The state seeks to have the rule overturned nationwide, arguing that it infringes on states’ rights under the U.S. Constitution to manage the compensation of their employees and budget allocations.

Judge Jordan agreed with Texas, stating that the Labor Department exceeded its authority by effectively altering federal law. “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,” he wrote.

Jordan is also overseeing a challenge to the rule by various business groups, and a separate lawsuit has been filed by a small marketing firm in another federal court in Texas contesting the regulation.