The U.S. District Court in the Eastern District of Texas ruled against the U.S. Department of Labor’s final overtime rule that would have increased minimum salary thresholds determining overtime eligibility.

Under the Fair Labor Standards Act, the new rule expanded overtime pay eligibility for workers, with those making $43,888 or less in a year able to qualify for overtime as of July 1. It would further expand that threshold to $58,656 as of Jan. 1, 2025, and be updated every three years.

The Department of Labor estimated around 4.3 million workers, representing 3% of workers, would be subject to the Fair Labor Standards Act rule change in the first year.

“For more than 80 years, the 40-hour workweek has been a pillar of fairness for American workers," said Acting Secretary of Labor Julie Su when the ruling took effect in July. "It’s the promise of going home to loved ones after putting in your time, not endless hours for flat pay. Far too many are stuck in jobs that disregard this principle.”

A coalition of various business groups and Texas officials challenged the rule, claiming the labor department exceeded its authority in setting the new rule. Among them was the Associated Builders and Contractors, which announced it had filed a complaint in May. The organization said the rule would reclassify a “massive amount” of ABC member employees as nonexempt, a move the group said would disrupt the entire construction industry and harm small businesses.

On Nov. 15, U.S. District Court Judge Sean D. Jordan agreed with the coalition's assessment and issued a nationwide injunction on the new rule. With the decision invalidating the new rule in its entirety, the threshold has reverted to $35,568, and other provisions in the rule changed back to their previous status.

“This decision is the correct one, and an important win for ABC members and the rest of the regulated community,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs.

The National Roofing Contractors Association noted on its website that it was pleased with the court’s ruling.

“Please note several states have their own overtime compensation laws not affected by this ruling and NRCA urges members to check with legal counsel regarding taking action in response to this ruling,” the NRCA website states.

The Department of Labor might appeal the decision, though the incoming Trump administration might drop the defense of the rule.

In 2016, the Obama administration issued a final overtime rule that would have doubled the minimum salary level for exemption from $23,660 to $47,476 per year. Associated Builders and Contractors, along with several other business groups, sued the Department of Labor in federal court and succeeded in blocking the rule from taking effect.