By Daniel Wiessner
(Reuters) – A federal judge in Texas on Friday temporarily blocked a Biden administration rule from taking effect that would extend mandatory overtime pay to 4 million U.S. workers.
U.S. District Judge Sean Jordan in Sherman, Texas, said the U.S. Department of Labor rule set to take effect Monday improperly bases eligibility for overtime pay on workers’ wages rather than their job duties.
Jordan, appointed by former Republican President Donald Trump, blocked the Labor Department from applying the rule to Texas state employees pending the outcome of a legal challenge brought by the Republican-led state.
The Labor Department and the office of Texas Republican Attorney General Ken Paxton did not immediately respond to requests for comment.
The department can seek review of the decision before the New Orleans-based U.S. Court of Appeals for the 5th Circuit, which is widely considered the most conservative federal appeals court.
The rule passed in April would require employers to pay overtime premiums to employees 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 threshold of about $35,500 was set in 2019.
Federal law exempts workers performing “executive, administrative, and professional” (EAP) duties from overtime pay, and the Department of Labor has for decades used salary as a factor in deciding when that applies.
In adopting the rule, the department said lower-paid workers often do the same work as their hourly counterparts, but work more hours without additional pay.
The rule also establishes automatic increases in the salary threshold every three years to reflect wage growth.
In its lawsuit, Texas said the rule violated federal law by conditioning overtime exemptions primarily on workers’ wages rather than their job duties, and is seeking to overturn it nationwide.
Texas argues that requiring states to increase overtime violates their right under the U.S. Constitution to structure state employee compensation and, therefore, decide how to allocate a large portion of their budget.
Jordan acknowledged Friday that the Labor Department had overstepped its authority by effectively rewriting federal law.
“Since the plain 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 presiding over a challenge to the rule by business groups, and a small marketing firm is suing the regulation in another federal court in Texas.
(Reporting by Daniel Wiessner in Albany, New York; editing by Sandra Maler and Daniel Wallis)
