Judge halts federal rule that would have expanded overtime pay to millions of workers
By Jonnelle Marte
November 22 at 9:04 PM - The Washington Post
A Texas judge ruled
Nov. 23 to halt federal rules that would have expanded overtime pay to more than
4 million workers. (Monica Akhtar/The Washington Post)
A Texas judge ruled Tuesday to put the brakes on federal rules that
would have expanded overtime pay to more than 4 million workers.
A rule from the Department of Labor that was supposed to take effect
next week would have made overtime pay available to full-time salaried employees
earning up to $47,476 a year, more than doubling the current threshold of
$23,660 a year.
Employees earning below that threshold would qualify to earn one and a half
times pay for any time worked beyond 40 hours a week. The rule was set to
go into effect Dec. 1.
The injunction from U.S. District Judge Amos L. Mazzant buys the court more
time to come to a final decision on the overtime rule, which was challenged by a
slew of business groups, including the Chamber of Commerce, as well as 21
states. The states and the businesses are disputing the salary component of the
rule, arguing that the Labor Department does not have the authority
to require that employers offer overtime to workers who earn below a
certain amount.
The Labor Department said Tuesday that it was considering all of its legal
options. gWe strongly disagree with the decision by the court, which has the
effect of delaying a fair dayfs pay for a long dayfs work for millions of
hardworking Americans,h the department said in a statement. gThe departmentfs
overtime rule is the result of a comprehensive, inclusive rulemaking process,
and we remain confident in the legality of all aspects of the rule.h
When the Labor Department finalized the overtime rule in May,
consumer advocates and union groups hailed the move as a major victory for
low- to middle- income workers. Before the latest action, the regulation
had not been updated in more than a decade. Supporters of the rule said
many workers who put in 50 to 60 hours a week may end up earning less than
minimum wage after all of their hours are factored in. The expectation was that
the long-awaited rule, which was requested by President Obama in
2014, would boost paychecks for some workers putting in extra hours.
But the rule faced stiff opposition from small businesses, states,
universities and other groups who said the higher threshold would raise costs.
Instead of offering bigger paychecks, some groups predicted that they would have
to switch employees from salaried jobs to hourly positions. Others said that
some workers would be assigned fewer hours.
gBusinesses and state and local governments across the country can breathe a
sigh of relief now that this rule has been halted,h said Nevada Attorney General
Adam Paul Laxalt. He called the regulation gfederal overreachh that could
have led to job losses and created financial burdens for small businesses.
After the injunction was granted on Tuesday, some labor groups said they
would keep pushing for new overtime rules. gThe business trade associations and
Republican-led states that filed the litigation in Texas opposing the rules have
won today, but will not ultimately prevail in their attempt to take away a
long-overdue pay raise for Americafs workers,h said Christine Owens, executive
director of the National Employment Law Project, a group that advocates for
lower-wage workers.
Two separate lawsuits were filed against the overtime rule in September
— one from a group of 21 states and one from the business groups. Their cases
were combined in October.
Some small business groups said they were glad for the delay. Some states and
businesses worried that the proposed threshold, which would have applied
nationwide, did not take into account differences in cost of living in different
areas. gThe restrictive nature of the final rule ignores the diverse business
models across industries in terms of how employees are compensated,h Karen
Kerrigan, president and chief executive of the Small Business &
Entrepreneurship Council, said in a statement. gWe are glad the court will give
this rule the fair hearing it never received from DOL regulators.h