A federal judge in Texas ruled against the US Department of Labor on November 15, invalidating a rule that would have raised the minimum wage threshold for workers to be eligible for overtime pay.
The rule was designed to expand overtime eligibility for workers making up to $35,568 a year to $43,888 starting July 1, and would have expanded it further Jan. 1 to workers who earn up to $58,656, or $1,128 a week. Eligibility thresholds and their scale would have been updated every three years from July 2027, based on current salary data. Labor Department officials estimated that the rule would have extended overtime eligibility to 4 million workers in its first year.
“Too often, lower-wage workers do the same work as their hourly counterparts, but spend more time away from their families without any extra pay,” Acting Labor Secretary Julie Su said as officials went end the rule in April.
Texas officials, as well as several business sector groups, including the Associated Builders and Contractors (ABC), filed challenges to the rule earlier this year. U.S. District Judge Sean Jordan ruled in his favor this month, calling the rule an “unlawful exercise of agency power.”
Labor Department officials exceeded their congressional authority under the Fair Labor Standards Act by changing eligibility requirements and exemptions with the rule, Jordan wrote.
“Some ABC members employ workers who would have lost their exempt status as of January 1 due to the scheduled increase in the 2024 overtime rule,” said Ben Brubeck, vice president of Regulatory, Labor and State Affairs of ABC, in a statement. “This would have disrupted the construction industry, specifically harming small businesses, restricting employees’ workplace flexibility in setting hours and schedules, and harming opportunities for career advancement.”
Labor Department representatives did not immediately respond to inquiries about the ruling or any possible appeals. Brent Booker, general president of the Workers International Union of North America, said in a statement that the ruling “rewards business at the expense of workers and women.”
“Overtime must be compensated with overtime pay, and the new threshold set by the Department of Labor is common sense policy to help put more in workers’ pockets,” Booker said.
Another federal judge in Texas previously struck down a 2016 Labor Department rule that would have raised the minimum overtime wage threshold to $47,476.
