Texas Court Strikes Down Overtime Rule

Late last week, Judge Sean Jordan of the U.S. District Court for the Eastern District of Texas ruled that the Biden Administration’s final overtime rule exceeded the Department of Labor’s authority under the Fair Labor Standards Act and the Administrative Procedures Act.  This decision, which followed a summary judgement hearing, effectively nullifies the rule in its entirety.  

As a result, the current overtime threshold amount required by law will remain $35,568 until a future administration proposes an increase.

The previously scheduled January 1, 2025, increase from $43,888 to $58,656 is no longer required for employers.  While the nullification of the entire rule also means that the July 1, 2024, increase from $35,568 to $43,888 also isn’t required, most employers will not undue pay increases, but may reclassify certain campus positions. The ruling also means that automatic increases to the threshold amount every three years will not happen.

This ruling comes as good news to the many NAICU institutions that have struggled to adjust to the scheduled increases in mandatory threshold amounts for overtime pay for many campus employees.  It’s also helpful that this ruling occurred with several weeks for campuses to adjust their plans prior to the end of the year.

For more information, please contact:
Karin Johns