A federal judge in Texas has granted a temporary injunction on Friday, which will halt the implementation of the Biden administration’s overtime pay regulation.
The regulation, scheduled to take effect on Monday, would have mandated employers to provide overtime pay to salaried employees earning less than $59,000 per year.
Furthermore, this threshold would have been increased every three years, with the current threshold set at $35,000 annually.
Here is some of what Emily Shumway reported for K-12 Dive:
“In the analysis that follows, the Court carefully follows Loper Bright’s controlling guidance and the APA [Administrative Procedure Act],” Jordan wrote in the decision — potentially the earliest in what is likely to be a slew of judicial action based on Friday’s landmark Supreme Court decision.
Relying on the Administrative Procedure Act, Texas referred to DOL’s 2024 changes to the EAP exemption as “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.”
In its passage of the Fair Labor Standards Act, Congress exempted EAP employees but did not define those terms, Jordan noted. “An examination of the ordinary meaning of the EAP Exemption’s undefined terms shows that the Exemption turns on an employee’s functions and duties, requiring only that they fit one of the three listed, i.e., ‘executive,’ ‘administrative,’ or ‘professional capacity,’” Jordan wrote. “The exemption does not turn on compensation.”
Many lawsuits challenging regulatory interpretations this spring have relied on the APA’s “arbitrary and capricious” argument. Among the plaintiffs are 17 red states that sued the U.S. Equal Employment Opportunity Commission in late April over its new harassment guidelines and a group of insurance industry affiliates seeking to stop DOL’s update to the definition of an investment advice fiduciary under the Employee Retirement Income Security Act.
Business groups led by the U.S. Chamber of Commerce also used the claim when they challenged the National Labor Relations Board’s joint employer rule — a case the groups similarly won in a Friday decision issued the Monday before the rule was slated to take effect.