A federal judge issued a nationwide injunction blocking a sweeping regulation set to qualify millions more Americans for overtime pay Dec. 1, delivering a blow to one of President Barack Obama’s signature workplace rules.
The Labor Department completed the rule in May as part of the Obama administration’s goal to restore and expand the middle class — either by raising incomes for workers in industries such as retail, food service and beyond or by giving them back personal time they’ve forgone while working extra hours unpaid.
The rule would require employers to start paying overtime to workers earning salaries of less than $47,476 a year-a threshold the business community and many states say is too big a jump from the current $23,660 last updated in 2004. Some workers whose salaries exceed the threshold can qualify for overtime pay depending on job duties.
Even without court action, the fate of the rule has been far from assured as it also faces a possible strong challenge from Donald Trump, the president-elect who has vowed to roll back business regulations.
The injunction was issued Tuesday by Judge Amos Mazzant in Texas.
Judge Mazzant in the order said the challengers had made a sufficient case “that the Department’s salary level under the Final Rule and the automatic updating mechanism are without statutory authority.”
The Labor Department wasn’t immediately available for comment.
The legal challenges to the rule originated as two separate complaints-one by a group of twenty-one states and the other by a coalition of more than 50 business groups. The plaintiffs, whose cases have since been consolidated, sought to overturn the rule on the grounds that it overstepped the government’s authority.
Among other things, the lawsuit originally filed by the states alleged that a mechanism in the rule that automatically will increase the overtime threshold every three years was finalized without going through a rule-making process plaintiffs contend is required by law. The plaintiffs said that step — an unprecedented move made by the Labor Department-means stakeholders won’t have the chance to provide their input before the massive changes take effect.
Please reach out to our Director of Compliance, Ann Poland if you have questions or contact your MJ Consultant directly.DOWNLOAD