Labor Department’s overtime pay rule struck down

A Texas judge last week overturned a rule that would’ve made four million more U.S. workers eligible for overtime pay. 

Catch up: In April, the Department of Labor published a rule to raise the minimum salary threshold for overtime pay from $35,500 to $58,600, starting on January 1, 2025. 

• The rule applied only to certain office roles and would have extended overtime pay eligibility to an additional four million employees — those making $58,600 or less. 

What’s happening: The business community, including trade groups ACCA and HARDI, immediately pushed back, filing lawsuits citing labor cost concerns and other issues. 

• Shortly after, a Texas judge — Sean Jordan — temporarily blocked the rule from taking effect in the state.
• And then on Friday, Jordan overturned the rule entirely, deeming it unlawful — nationwide.

What’s next: The Labor Department may appeal the decision, but, per HBS Dealer, the Trump administration will “almost assuredly abandon its defense.” The minimum salary threshold for overtime will now go back to $35,500.