Construction contractors and other employers are now faced with new, expanded federal overtime rules for employees.

The U.S. Department of Labor’s rule took effect July 1 and extended overtime protection to about 1 million workers in the U.S., including those in the construction industry.

The rule, however, faces legal challenges. A federal judge in Texas has already blocked the rule from affecting public workers in Texas. Business groups, including those representing the construction industry, have also filed suit to block the new rule.

But for now, the rule is in effect. As of July 1, the minimum threshold on salaried workers eligible for overtime rose from $35,568 to those earning $43,888 a year. The eligibility threshold rises again January 1 to $58,656. Beginning July 1, 2027, salary levels will update every three years.

The Associated Builders and Contractors joined a lawsuit filed by other business groups in May to block the rule.

“This will disrupt the entire construction industry, specifically harming small businesses, as the rule will greatly restrict employee workplace flexibility in setting schedules and hours, hurting career advancement opportunities,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs