Written by Danielle Wiesner
(Reuters) – A federal judge in Texas on Friday temporarily blocked a Biden administration rule from going into effect that would extend mandatory overtime pay to four million salaried American workers.
U.S. District Judge Sean Jordan in Sherman, Texas, said a rule drawn up by the U.S. Department of Labor that is scheduled to take effect Monday incorrectly determines eligibility for overtime pay based on workers’ wages, not their job duties.
Jordan, who was appointed by former Republican President Donald Trump, has blocked the Labor Department from enforcing the rule on state workers pending the outcome of a legal challenge brought by the Republican-led state.
The Labor Department and the office of Texas Attorney General Ken Paxton, a Republican, did not immediately respond to requests for comment.
The department could seek a review of the ruling in the New Orleans-based 5th U.S. Circuit Court of Appeals, widely considered the most conservative federal appeals court.
The rule, adopted in April, requires employers to pay overtime premiums to salaried workers who earn less than $1,128 a week, or about $58,600 a year, when they work more than 40 hours a week. The current limit of about $35,500 was set in 2019.
Federal law exempts workers with “executive, administrative, and professional” (EAP) duties from receiving overtime pay, and for decades the Department of Labor has used salary as one factor in determining when it applies.
In adopting the rule, the department said that workers who earn less often do the same jobs as their hourly counterparts, but they work more hours without overtime pay.
The rule also provides for automatic minimum salary increases every three years to reflect wage growth.
Texas said in its lawsuit that the rule violates federal law by tying overtime exemptions primarily to workers’ wages rather than their duties, and is seeking to have it repealed nationwide.
Texas argues that subjecting states to expanded overtime violates its right under the US Constitution to structure the wages of state employees and thus determine how large portions of their budgets are allocated.
Jordan agreed Friday that the Labor Department exceeded its authority by effectively rewriting federal law.
“Because the ordinary meaning of the EAP exemption focuses only on duties, any rule implementing the EAP exemption — including the 2024 rule — must also focus on duties,” the judge wrote.
Jordan is also chairing a challenge to the rule by business groups, and a small marketing firm is suing over the regulation in a different federal court in Texas.
(Reporting by Daniel Wiesner in Albany, New York; Editing by Sandra Maler and Daniel Wallis)
