Is Obama’s Overtime Expansion Dead?

| Nov 22, 2016 | Wage And Hour Laws |

On November 22, 2016, a federal judge blocked the Obama administration’s rule change that would have expanded eligibility for overtime pay for people making up to $47,476 per year. The judge issued a temporary injunction that is effective nationwide until a final decision is made in the case. The rule was scheduled to go into effect on December 1, 2016 and would have affected more than 4.2 million employees across the U.S.

Judge Amos Mazzant of the Eastern District of Texas, an Obama appointee, blocked the rule, asserting that federal law does not allow the Department of Labor to set eligibility for overtime based solely on salary level. Rather, the judge said that the Department must consider the duties that the employees perform. In their lawsuit contesting the regulation, twenty-one states and a number of business groups claimed that the revised overtime rule was arbitrary and violated federal law. The case is Nevada v U.S. Department of Labor, 16-00731, U.S. District Court, Eastern District of Texas (Sherman).

What comes next? It’s possible that the judge could ultimately rule in favor of the Department of Labor and allow the rule to go into effect. But both the substance and tone of Judge Mazzant’s language would lead one to doubt that this will happen. In his ruling, the judge wrote:

“Congress defined the … exemption with regard to duties, which does not include a minimum salary level. The Department’s role is to carry out Congress’s intent. If Congress intended the salary requirement to supplant the duties test, then Congress, and not the Department, should make that change.”

Even if the Department of Labor prevails in the suit, the Republican-controlled Congress and the incoming Trump administration could put the brakes on the higher overtime eligibility threshold.


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