Districts will be spared additional overtime costs after a federal judge struck down a rule that would have required them to offer the additional pay to a larger swath of employees.
In a Nov. 15 order, Judge Sean Jordan of the U.S. District Court for the Eastern District of Texas blocked the rule by the U.S. Department of Labor that would have extended overtime pay to an estimated 4 million employees nationwide who were previously considered exempt under the Fair Labor Standards Act.
Teachers and administrators would have remained exempt from federal overtime requirements under that rule, finalized by the agency in April—but districts expected employees like school nurses, athletic trainers, and librarians to be affected.
Since 2019, eligible employees who earn less than $35,308 a year have qualified for overtime pay if they work more than 40 hours a week. The new rule was scheduled to set a maximum salary level of $43,888 by July 1, but Jordan previously paused its implementation through a preliminary injunction in June. His final ruling will block that change, and a second Jan. 1 increase that would have further raised the threshold to $58,656.
The rule also would have automatically increased salary thresholds every three years starting in July 2027, relying on new federal data on average wages, the Labor Department said.
The Labor Department exceeded its regulatory authority when it created the rule, Jordan wrote in his order, in part because its plan did not properly screen out employees with management and administrative duties, who are exempt from federal overtime requirements.
Trump not likely to challenge ruling
The Biden administration could appeal the ruling, but the incoming administration of President-elect Donald Trump is not likely to continue any legal objections when he takes office in January. During Trump’s previous term, the Labor Department did not object when a federal court struck down a similar 2016 rule.
The Association of School Business Officials and AASA, the School Superintendents Association, were among the industry groups which sought to delay the rule’s implementation, warning of financial and logistical concerns.
To prepare for the rule’s implementation, districts were set to decide if they would restructure employees’ responsibilities to reduce the likelihood of overtime hours, hire additional staff to reduce workloads, or provide slight pay increases to employees near the exemption threshold, Noelle Ellerson Ng, the associate executive director of advocacy and governance for AASA, said in a May interview.
Districts that opted to pay overtime to their newly qualified employees would have also had to adopt new methods to track their work hours and ensure compliance with the rule, she said.
The lawsuit was brought by the state of Texas and a coalition of trade associations and employers.
“The 2024 Rule impacts millions of employees in every facet of the economy, as well as state and local governments, and will impose billions in costs to employers,” Jordan wrote in his ruling.
