Court Ruling Delays Implementation of New Overtime Rules in Texas

A federal district judge in Texas ruled against the Department of Labor’s (DOL) final overtime rule, issuing a preliminary injunction delaying the rule from taking effect for Texas state employees. While this ruling is not nationwide and does not impact private employers in the state, it does set a precedent that the final overtime rule could eventually be ruled unlawful.

Except for Texas public employees, the July 1 salary increase, from $35,568 to $43,000, for employees to be exempt from overtime pay, has gone into effect as scheduled. Additional court cases on the overtime rule continue to await consideration as the second salary threshold increase looms on January 1, 2025. 

This ruling is one of the first to follow the Supreme Court’s ending of the Chevron deference. The 1984 Supreme Court ruling held that when Congress passes a law that lacks specificity, courts must give wide leeway to the federal agencies charged with implementing that law. In making his ruling, U.S. District Judge Sean Jordan cited the Chevron ruling in indicating the court does not have to accept the final overtime rule as lawful. However, the same Texas court struck down the overtime rule issued during the Obama Administration in 2016 prior to the Supreme Court’s ruling on Chevron, so the true effect of the Chevron ruling on the overtime rule remains to be seen.