NEW YORK — The U.S. Department of Labor has withdrawn its appeal of a federal court decision blocking a controversial Biden-era overtime rule, ending a legal fight over a policy critics argued would have reduced overtime pay opportunities for workers nationwide.
The rule, blocked by a U.S. District Court in late 2024, would have raised the salary threshold for exempt white-collar employees from $35,568 to $58,656 annually. Supporters said the change would expand worker protections, but opponents argued it would have had the opposite effect for many employees by reclassifying workers into exempt categories that could eliminate overtime pay eligibility.
Employment attorney Steven Mitchell Sack, known as “The Employee’s LawyerⓇ,” said the Labor Department’s decision to abandon the appeal represents a major victory for workers concerned about losing overtime income.
“This rule was promoted as helping employees, but, in practice, it could have prevented many workers from earning overtime altogether,” said Sack. “For countless employees, overtime pay is essential income used to cover rent, groceries, childcare, and savings. The court recognized the Department of Labor exceeded its authority, and dropping the appeal avoids further harm to workers.”
The litigation centered on whether the Department of Labor had the authority under the Fair Labor Standards Act to automatically increase salary thresholds every three years. The New Civil Liberties Alliance argued the rule violated both the Administrative Procedure Act and federal labor law.
A second federal court later vacated the rule entirely, though the federal government initially appealed before pausing the case for further review. The Department of Labor has now formally ended that appeal.
Sack said the decision highlights growing scrutiny over federal labor regulations that may produce unintended economic consequences for employees and employers alike.
“Workers deserve policies that increase earning opportunities — not regulations that risk taking money out of their pockets,” Sack added.
