One week before a new rule was set to take effect requiring employers expand overtime pay to more than four million low-income, but still technically white-collar American workers, a federal judge blocked the Obama administration measure Tuesday, issuing a national injunction against its implementation. U.S. District Judge Amos Mazzant, an Obama appointee, sided with 21 states (all but one headed by a Republican governor) and an assortment of business interests in ruling against the measure, meaning that salaried employees making more than $23,660 per year will continue to be ineligible for overtime pay.
By requiring employers to pay overtime wages based on salary rather than an employee’s duties, the Labor Department exceeded its authority under the Fair Labor Standards Act and ignored Congress’s intent, Mazzant said in his ruling. “If Congress intended the salary requirement to supplant the duties test, then Congress and not the department, should make that change,” he said.
The decision Tuesday is a victory for 21 states and dozens of business groups that sued, complaining the new rule would increase government costs in their states by $115 million next year alone and would put private employers on the hook for millions of dollars more, possibly leading to layoffs.
Republicans in congress already had their sights on jettisoning the Obama-backed measure that would have, among other things, raised the threshold which employees would be required to be paid overtime to $47,476 per year, double it’s current rate, for any work exceeding 40 hours per week. “The Republican Congress has been so bent on halting the rule that the House may adjourn a week or more earlier than planned largely so that it may block the rule after Jan. 20 under the Congressional Review Act, a mechanism linked to the length of the legislative calendar,” Politico reports.
“Employers that made big changes in their workforce ahead of the rule’s Dec. 1 effective date—either by raising managers’ salaries to the newly set threshold for overtime pay or eliminating job categories like assistant manager—say they aren’t yet planning to reverse course, while others are taking a wait-and-see approach,” the Wall Street Journal reports.
The new rules would have gone into effect Dec. 1. And for those of you counting at home, this is the fourth time in two years that a Texas judge has upended Obama’s agenda by issuing nationwide injunctions blocking his executive orders.