NEW YORK — A federal judge in Texas stopped the Biden administration from putting in place a new rule that would have let millions more salaried workers across the U.S. get extra pay.
U.S. District Judge Sean Jordan sided with the state of Texas and a group of business groups on Friday. They said the Labor Department went beyond its power when it finalized a rule earlier this year that made it much easier for salaried workers to get overtime pay.
Federal law says that almost all paid workers in the U.S. should get extra pay after working 40 hours a week. But a lot of salaried workers don’t have to do that unless their pay is below a certain amount.
The Labor Department’s rule, which has since been canceled, would have raised that cap by the most in decades. From July 1, employers had to pay salaried workers making less than $43,888 a year extra hours in certain executive, administrative, and professional jobs. Next year, that amount will go up to $58,656.
The Labor Department thought that the new rule would make it possible for an extra 4 million lower-paid salaried workers to get overtime pay in the first year. Through separate threshold increases, an extra 292,900 workers who were paid more were also supposed to be able to get overtime pay.
The previous level of $35,568 was set in 2019 by the Trump government and is about to be put back in place.
When the Associated Press called the Labor Department on Friday, a spokeswoman did not say anything right away.
When the rule was finalized in April, acting Labor Secretary Julie Su said that the government was “keeping our promise to raise the bar.” She also said that it was “unacceptable” for salaried workers to do the same work as hourly workers without getting paid more.
As soon as this year’s rule was made official, court challenges started to come up. Several business groups said the move would hurt companies and raise costs so high that companies might have to lay off workers or limit their hours.
It’s not the first time a court has thrown out a plan to increase extra pay. In 2016, an attempt during the Obama administration to similarly make more people eligible for overtime pay was ultimately shot down in court after some business leaders and Republican politicians spoke out against it.
