Federal Judge Strikes Down Overtime Expansion

A Texas federal judge struck down a U.S. Department of Labor (DOL) rule on November 15 that would have expanded overtime eligibility to about four million new workers. The new rule, which began July 1, tweaked the Fair Labor Standards Act test used to determine whether a worker should be subject to an exemption to overtime pay requirements.

The decision comes before the second phase of the rule was set to take effect. In that phase, employees making less than $58,656 a year would be eligible for overtime pay. The current cutoff, which took effect in July under the first phase of the policy, is $43,888. But in his ruling, District Judge Sean D. Jordan tossed the entire rule, resetting the overtime threshold to $35,568 finding that the agency went beyond its authority and exceeded its statutory jurisdiction. This order now applies nationwide.

The Alliance will continue to apprise members of any updates related to the FLSA overtime regulation as more details emerge, including potential retroactivity as well as responses from the Federal Department of Labor and State entities.