Trump Labor Department Blocks Overtime Pay For Four Million Workers Months After Vowing Not To Tax The Overtime Pay They Now Will Not Receive

WASHINGTON. The Department of Labor published a technical amendment in the Federal Register on Friday formally rescinding a 2024 rule that would have extended overtime protections to millions of salaried workers, resolving a long-standing concern within the administration that Americans earning between $35,568 and $58,656 a year might one day be compensated for the hours they work beyond forty.

The rescinded rule, finalized under President Biden, would have raised the salary threshold below which workers automatically qualify for time-and-a-half to $58,656 by January 2025, with automatic adjustments every three years. In its place, the Department reinstated the threshold set during President Trump's first term, $35,568, a figure last updated in 2019 and now restored to its rightful place as the line above which an employer may classify a worker as a manager and decline to pay for a sixty-hour week.

The Department framed the reversal as a matter of regulatory housekeeping. "This simply restores clarity and predictability for employers," said a Labor Department official, who noted that the earlier rule had already been vacated by a federal court and who declined to specify which workers would benefit from the newly restored ceiling on their pay. An estimated four million workers stood to gain or strengthen overtime eligibility under the 2024 rule.

The action arrived less than a year after the President signed the One Big Beautiful Bill, whose "No Tax on Overtime" provision he has repeatedly hailed as a historic gift to the American worker. Under that provision, eligible employees may deduct up to $12,500 in overtime earnings from their taxable income, a benefit available exclusively to those permitted to earn overtime in the first place. Friday's amendment ensures that a substantial number of Americans will now enjoy the security of never having to calculate the deduction at all.

Administration officials characterized the twin measures as complementary. By first promising not to tax overtime and then arranging for fewer people to receive it, the President has, sources within the administration said, delivered relief on both ends, freeing workers from a tax they will not owe on wages they will not collect.

At press time, the Labor Department confirmed that any worker dissatisfied with the arrangement remained free to seek a demotion to an hourly position paying less than $35,568, at which point full overtime protections would once again apply.