A judge has blocked the Biden administration’s rule to increase overtime pay for millions

NEW YORK – A federal judge in Texas has blocked a new rule by the Biden administration that would have expanded access to overtime pay for millions of other U.S. workers.

On Friday, U.S. District Judge Sean Jordan sided with the state of Texas and a group of business organizations that argued the Labor Department overstepped its authority when finalized the rule earlier this year significantly increase overtime pay for salaried employees — ruling that the department cannot prioritize an employee’s salary over job duties in determining eligibility.

Under federal law, almost all hourly workers in the U.S. are entitled to overtime pay after 40 hours in a week. But many salaried workers are exempt from this requirement as long as they do not earn below a certain level.

The Labor Department rule, now overturned, would have marked the largest increase in that limit in a decade. Starting July 1, employers were required to pay overtime to workers who earn less than $43,888 a year in certain managerial, administrative and professional positions, and that amount is set to rise to $58,656 next year.

The Labor Department estimated that 4 million more low-wage workers would be eligible for overtime protection in the first year under the new rule. An additional 292,900 highly paid workers are also expected to become eligible for overtime through a separate increase in the threshold.

Now, the previous threshold of $35,568, which was set in 2019 under the Trump administration, is set to go back into effect.

A Labor Department spokesman had no comment when contacted by The Associated Press on Friday. It is unclear whether the department will seek to appeal the decision of Jordan, who was nominated to his seat by Republican President-elect Donald Trump during his first term.

At the time the rule was finalized in April, Acting Secretary of Labor Julie Suh stated that the administration is “holding to our promise to raise the bar” — noting that it is “unacceptable” for low-wage workers to do the same work as their hourly counterparts without additional pay.

After the completion of this year’s rule, the legal problems began. Several trade groups argued that the move would hurt business and lead to costs that would potentially force employers to cut jobs or limit working hours.

David French, executive vice president of government relations for the National Retail Federation — one of the groups that challenged the Labor Department rule — said in a statement Friday that the changes “would limit retailers’ ability to offer the most flexible, generous and tailored benefit packages for lower-level laid-off workers across the industry.”

Friday’s decision is deja vu. In 2016, there was an Obama-era effort to expand the right to overtime pay eventually shot in court after facing opposition from some business leaders and Republican politicians.

The Trump administration later implemented a smaller increase to mark the occasion the first increase since 2004. Supporters of the overtime pay increase stress that it falls far short, arguing that too many salaried workers are still short on time, but that potential changes during Trump’s upcoming second term are unlikely to match those demands.