Federal judge halts Biden administration's rule on overtime pay

A federal judge in Texas on Friday temporarily blocked a new Biden administration rule that would extend the requirement for overtime pay to 4 million salaried US workers. A federal judge in Sherman, Texas, blocked the US Department of Labour rule, which was originally expected to take effect on Monday. Judge Jordan, an appointee of former President Donald Trump, ruled that the regulation improperly based eligibility for overtime pay on workers' wages rather than their job duties.

The Labour Department's rule would require employers to pay overtime premiums to salaried workers earning less than $1,128 per week, or about $58,600 per year if they work more than 40 hours in a week. The rule had bumped up the current threshold of about $35,500, set in 2019. It also includes an automatic increase in the salary threshold every three years to keep pace with wage growth.

Federal law permits employers to exempt those in "executive, administrative, and professional" jobs from receiving overtime pay. For decades, the Labour Department interpreted the regulation to consider salary only one of several factors defining those exemptions. It argued that many lower-paid salaried workers did exactly the same tasks as hourly employees but worked much longer hours for no extra pay.

Add WION as a Preferred Source

"Since the ordinary meaning of the EAP Exemption focuses solely on duties, any rule implementing the EAP Exemption - including the 2024 Rule — must likewise centre on duties," the judge wrote.

The Labour Department and the office of Republican Attorney General of Texas Ken Paxton did not return a request for comment. The department can appeal the ruling to the 5th U.S. Circuit Court of Appeals in New Orleans-one of the most conservative federal appeals courts.

In addition, another challenge to the rule by business groups is being presided over by Judge Jordan, and another federal court in Texas has a challenge brought against the regulation by a small marketing firm.

This development poses a major blow to the Biden administration in having to provide better protection for workers and see that salaried employees get paid for working overtime. This case is likely to have wide implications on labour laws and employee protection across the United States.