Texas Judge Eliminates Federal Overtime Rule – Update
Texas Judge Eliminates Federal Overtime Rule – Update
A federal judge in Texas entirely eliminated a rule from President Joe Biden’s administration that expanded overtime protections for workers by requiring employers to pay overtime premiums to more salaried people, eliminating one of the highest-profile Labor Department rules enacted during the Biden administration.
Judge Sean D. Jordan in the U.S. District Court for the Eastern District of Texas—who was appointed by President-elect Donald Trump in his first term—said the Labor Department went beyond its authority when implementing the rule.
The rule had the potential to make about 4 million more salaried workers eligible for overtime pay, which includes exempt executive, administrative, professional, outside sales and computer employees. The first phase of the rule went into effect on July 1 and raised the salary threshold to be eligible to be exempt for overtime from around $35,000 to almost $44,000, and the next increase—which would have gone into effect next year—would have raised it to nearly $59,000. The law also mandated that, beginning on July 1, 2027, the minimum threshold for overtime exemption would increase every three years.
The threshold for overtime eligibility will now revert back to $35,568, which is what it was set at in 2019 under the Trump administration. There is no clarity as to how the threshold set by Trump’s administration in 2019 is valid but the threshold set by Biden’s administration is not. It appears that politics will determine whether this ruling by the federal judge in Texas will be appealed. For now, $35,568 is the threshold.
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