A federal judge in Texas ruled against the U.S. Dept. of Labor Nov. 15, invalidating a rule that would have increased the minimum salary threshold for workers to qualify for overtime pay.

The rule was designed to widen overtime pay eligibility for workers, from those earning up to $35,568 per year to those earning as much as $43,888 as of July 1, and would have expanded it further on Jan. 1 to workers earning up to $58,656, or $1,128 per week. Eligibility thresholds and their scale would then have been updated every three years starting in July 2027, based on current wage data. Labor Dept. officials estimated the rule would have extended overtime pay eligibility to 4 million workers in its first year.

“Too often, lower-paid salaried workers are doing the same job as their hourly counterparts but are spending more time away from their families for no additional pay,” Acting Labor Secretary Julie Su said when officials finalized the rule in April.

Texas officials, as well as various business sector groups including the Associated Builders and Contractors (ABC), filed challenges to the rule earlier this year. U.S. District Judge Sean Jordan decided in their favor this month, calling the rule “an unlawful exercise of agency power.” 

Labor Dept. officials exceeded their authority from Congress under the Fair Labor Standards Act in changing eligibility requirements and exemptions with the rule, Jordan wrote. 

“Some ABC members employ workers who would have lost their exempt status as of Jan. 1 because of the 2024 overtime rule’s scheduled increase,” said Ben Brubeck, vice president of regulatory, labor and state affairs at ABC, in a statement. “This would have disrupted the construction industry, specifically harming small businesses, restricting employee workplace flexibility in setting schedules and hours, and hurting career advancement opportunities.”

Labor Dept. representatives did not immediately respond to inquiries about the ruling or any possible appeal. Brent Booker, general president of the Laborers’ International Union of North America, said in a statement that the ruling “rewards businesses at the expense of working men and women.”

“Overtime work should be compensated with overtime pay and the new threshold set by the Department of Labor is common sense policy to help put more in the pockets of workers,” Booker said. 

Another federal judge in Texas previously overturned a 2016 Labor Dept. rule that would have expanded the overtime minimum salary threshold to $47,476.