On February 28, the U.S. Department of Labor appealed a federal court decision that blocked the Biden DOL’s rule to expand overtime pay protections from going into effect.
Under the Fair Labor Standards Act, most workers are entitled to overtime pay when they work more than 40 hours in a week, meaning that for any hours over 40, they are paid at 1.5 times their regular pay rate for the extra hours they work. The protection is intended to make employers think twice about overworking their employees, and to ensure that if employees work long hours, that they get extra pay for it. However, for salaried workers, their right to overtime pay is based on their pay and the nature of their work (or “duties”). Under the Biden administration, DOL issued a new regulation on overtime pay for these salaried workers, which would have expanded the right to overtime pay for 4.3 million workers, giving the right to overtime pay protections to most workers making under roughly $58,656 per year.
An alliance of business and employer interest group sued the Department of Labor over the rule and successfully blocked it in November 2024. While it remains to be seen what the ultimate fate of the overtime rule will be, the Trump DOL’s decision to appeal the ruling is an encouraging sign that the agency may still be willing to defend DOL’s authority to set the salary threshold that determines overtime pay eligibility.
Impact: If the Department of Labor chooses to defend the overtime rule by appealing the federal court decisions that have blocked it, and the rule goes into full effect, workers would receive an increase of $1.5 billion in pay. If DOL drops the defense of the rule, the threshold for eligibility will remain at the same inadequate level where it was set in the first Trump administration, leaving millions of workers stuck working excessive hours at low pay.