A significant ruling in Texas has halted a planned expansion of overtime eligibility for salaried employees championed by the Biden administration.

U.S. District Judge Sean Jordan dismissed a Biden Department of Labor rule that would have increased the salary threshold for mandatory overtime, as Just the News reports.

The Department of Labor under the Biden administration proposed a rule that aimed to raise the minimum salary level to qualify for overtime from $35,500 to $58,600 annually.

This rule was designed to extend overtime pay to millions more employees working over 40 hours a week.

Judge Jordan, appointed by former President Donald Trump, issued his ruling on a Friday, marking a significant setback for the current administration's labor policies.

The rule was scheduled to take effect at the beginning of 2025.

Controversial Overtime Expansion Rule Reverted

In his decision, Judge Jordan pointed out that the proposed change exceeded the statutory jurisdiction of the Department of Labor. He noted that the adjustment to the salary threshold effectively sidelined the evaluation of an employee's job functions.

The judge's ruling emphasized that the 2024 rule would have shifted focus solely to salary levels, neglecting the nature of the employees' duties. This, he argued, contradicted the intended balance between salary and responsibility set by existing laws.

According to Bloomberg, Judge Jordan remarked, "The Department’s changes to the minimum salary level in the 2024 Rule exceed its statutory jurisdiction."

He further highlighted that the imposed salary level effectively eliminates the consideration of whether employees perform executive, administrative, or professional duties.

Impact of Ruling on Employers and Employees

Employers nationwide breathed a sigh of relief following the ruling, as the higher threshold would have substantially increased payroll costs. Critics of the rule argued that it could lead to job cuts or reduced working hours to avoid meeting the new overtime criteria.

The decision maintains the current salary threshold at $35,500, set in 2019, affecting millions of workers across the United States who might have benefited from the increased earnings through overtime.

This judicial decision has stirred a mix of reactions, reflecting the ongoing debate over the balance between supporting workers and managing business expenses in different economic sectors.

Broader Implications for Labor Policies

The dismissal of the overtime rule raises questions about future efforts to modify labor standards under the Biden administration.

It also underscores the challenges of enacting significant changes in labor policy amid varying judicial interpretations of statutory authority.

As businesses and workers alike watch these developments, the dialogue around fair labor standards and economic sustainability continues to evolve.

The outcomes of such legal battles are likely to influence future policy decisions in the labor sector significantly.

While the administration has not commented on its next steps, legal experts and labor advocates are keenly observing potential appeals or alternative approaches to expanding worker protections under federal law.