Millions of salaried workers were poised to see a significant increase in overtime eligibility under a new Department of Labor rule. However, a federal judge in Texas has struck down this rule, rolling back the clock on proposed wage protections. This ruling leaves many employees wondering: What happens next?
At Spiggle Law Firm, we’re here to break down the legal developments and their potential impact. If you’re dealing with workplace concerns or suspect your rights have been violated, a consultation with an experienced Labor and Employment Lawyer is the first step toward clarity.
What Was Biden’s Overtime Rule?
Earlier this year, the Biden administration proposed a new rule under the Fair Labor Standards Act (FLSA) that would significantly expand overtime protections for salaried workers. The proposed changes would:
• Increase the annual salary threshold for overtime eligibility from $35,568 to $43,888 as of July 2024.
• Further raise the threshold to $58,656 in January 2025.
• Add an automatic adjustment every three years to account for inflation.
Under the rule, an estimated 4 million additional salaried workers would have gained overtime pay for hours worked beyond 40 per week. This would have marked the most substantial adjustment in decades.
Why Did the Court Strike Down the Rule?
On November 15, U.S. District Judge Sean Jordan ruled that the Department of Labor exceeded its authority in issuing the new overtime rule. According to Judge Jordan, the rule improperly prioritized salary over job duties—a move he stated conflicts with the FLSA’s intent.
The ruling effectively reinstates the previous salary threshold of $35,568, set during the Trump administration in 2019.
This decision isn’t unprecedented. In 2016, a similar Obama-era proposal was struck down in court following challenges from business groups and Republican-led states. The legal reasoning mirrored Judge Jordan’s decision: The rule gave too much weight to salary and insufficient attention to job duties.
Who Is Affected?
Industries like retail, higher education, and healthcare were preparing for significant changes under the proposed rule. For example, in higher education, roles such as admissions officers and student affairs staff would have become eligible for overtime pay.
However, some employers voiced concerns about the rule’s rapid implementation. Steven Bloom, vice president of Government Relations at the American Council on Education, warned that the changes could be “highly disruptive” without adequate transition periods.
For workers, the blocked rule means fewer opportunities to receive overtime pay unless Congress or future administrations revisit the issue.
Implications for Employers and Workers
With the previous threshold of $35,568 back in place, employers may find themselves reconsidering compensation structures they had adjusted for compliance with the now-invalidated rule. Workers who had expected higher pay protections must continue navigating an outdated wage system.
Employers should take this opportunity to review their classification of employees and ensure compliance with existing FLSA rules. If you’re uncertain about your rights as an employee, consulting with a Labor and Employment Lawyer can help you understand your options.
What’s Next?
With President-elect Donald Trump set to take office, it’s unlikely that this ruling will face an appeal or reversal. His administration previously enacted a modest threshold increase in 2019 and is expected to maintain a similar stance during his upcoming term.
Workers and employers should monitor developments closely. As legal challenges to wage protections continue, it’s essential to stay informed and proactive.
Take Action Today
The overtime debate highlights broader tensions between employee rights and employer flexibility. If you’re concerned about your pay structure, misclassification, or workplace rights, the team at Spiggle Law Firm is here to help.
Schedule a consultation with a Labor and Employment Lawyer today to ensure your rights are protected and your next steps are clear.
