Editor's Note: This is a developing story.
On Friday, Nov. 15, a Texas federal judge blocked the U.S. Department of Labor’s nationwide overtime final rule that would have expanded access to overtime pay to millions of salaried workers in the U.S. The court had previously blocked the rule in the state of Texas.
Judge Sean D. Jordan in the U.S. District Court for the Eastern District of Texas said the Labor Department went beyond its authority when implementing the rule.
The decision now means the overtime threshold scheduled to become effective on Jan. 1, 2025 will not go into effect, according to employment law firm Littler Mendelson P.C. The court also struck down the July 1, 2024 increase that previously went into effect and held that the final rule’s automatic “escalator” provision, which would have increased the threshold every three years going forward, was also unlawful.
Employers were required to pay overtime to salaried workers who make less than $43,888 a year as of July 1 — that was set to rise to $58,656 on Jan. 1. The previous threshold of $35,568 — which was set in 2019 under the Trump administration — is poised to go back into effect, according to reports.
Attorneys at Littler said employers are advised to consult with counsel before rescinding any changes made by the now-invalidated July 1 increase. Employers should also be aware that five states (Alaska, California, Colorado, New York and Washington), three New York counties as well as New York City have their own salary thresholds.
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