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A federal judge in Texas has blocked a new rule from the Biden administration that would have expanded access to overtime pay to millions more salaried workers across the U.S.
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 exceeded its authority when it finalized a rule earlier this year to significantly expand overtime pay for salaried workers—ruling that the department could not prioritize employee wages over job duties when determining eligibility.
Under the federal law, nearly all hourly workers in the U.S. are entitled to overtime pay after 40 hours a week. But many salaried workers are exempt from that requirement—unless they earn below a certain level.
The Labor Department’s now-scuttled rule would have marked the biggest increase to that cap in decades. Employers were required pay overtime to salaried workers who make less than $43,888 a year in certain executive, administrative and professional roles as of July 1—and that was set to rise to $58,656 next year.
The Labor Department estimated that an additional four million lower-paid salary workers would become eligible for overtime protections in the first year under the new rule. An additional 292,900 higher-compensated workers were also expected to get overtime entitlements through separate threshold increases.
Now, the previous threshold of $35,568—which was set in 2019 under the Trump administration—is poised to go back into effect.
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