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On Monday, a federal judge in Texas expressed doubts during a hearing about a Biden administration rule designed to provide overtime pay to 4 million U.S. workers — raising questions about the future of labor laws and their impact on workers.
The rule, scheduled to take effect on July 1, mandates that employers pay overtime premiums to salaried workers earning less than $1,128 per week.
Reuters reports that U.S. District Judge Sean Jordan suggested that the U.S. Department of Labor might have overstepped federal wage laws by focusing on salaries rather than job duties to determine eligibility for overtime pay.
The new regulation significantly increases the salary threshold from the current $35,500 set in 2019 to approximately $58,600 per year. Under the new regulation, the salary threshold will increase to $43,888 on July 1 and to $58,656 on January 1, 2025. Starting in 2027, the threshold will automatically increase every three years to reflect changes in average earnings.
It’s reported that Judge Jordan is considering a motion brought forward by Republican Texas Attorney General Ken Paxton to prevent the rule from being implemented while the state’s lawsuit proceeds. One of the key issues Jordan deliberated was whether to apply this injunction nationwide or restrict it solely to Texas state employees.
The judge’s skepticism centers around whether the new salary threshold undermines the primary criteria of job duties — which federal law uses as to determine eligibility for overtime pay.
The overtime pay law has also led prominent business groups to file a lawsuit against the Biden administration’s new overtime pay regulation.
The lawsuit includes the National Federation of Independent Business, the International Franchise Association, and the National Retail Federation. These groups contend that the costs of complying with the new rule will disproportionately affect smaller employers and non-profits operating on fixed budgets, potentially leading to cuts in critical programming, staffing, and public services.
Legal experts, industry representatives, and policymakers are closely watching the developments, as the case’s outcome could profoundly impact how overtime regulations are enforced nationwide, potentially reshaping employer compliance strategies and labor policies for millions of American workers.
