Overtime Final Rule Goes into Effect as Judge Blocks Rule in Texas

On Friday, June 28, the US District Court for the Eastern District of Texas issued a decision in the Texas Attorney General’s case challenging the Department of Labor’s (DOL) overtime final rule. The judge issued a temporary restraining order (TRO) blocking the rule’s implementation for employers in Texas. For all other employers, the rule went into effect on July 1. The minimum salary threshold is now set at $43,888, and the threshold for highly compensated employees is $132,964.

In a statement on July 1st, Acting Secretary of Labor Julie Su said, “This rule helps ensure that more lower-paid salaried workers who should receive overtime protections under the law receive those protections. Starting today, roughly 1 million workers making $43,888 or less are newly eligible for overtime benefits. And in 2025, the salary threshold will increase to $58,656, then update every three years. That means more money in these workers’ pockets and a little more breathing room.”

Below is the DOL’s estimate of newly eligible workers by region:

Despite the limited scope of the TRO in Texas it is a notable development that could have broader implications. Courts issue TROs when they believe the plaintiffs have a strong case, suggesting that the District Court may be unsure about the DOL’s rule and could potentially nullify it entirely.