Tuesday, November 22, 2016

Federal judge in Texas blocks Labor Department expansion of overtime pay

Posted By on Tue, Nov 22, 2016 at 5:08 PM

Federal Judge Amos Mazzant, a judge for the eastern district of Texas, has issued a preliminary injunction against a new Department of Labor rule on the income at which employees are entitled to overtime pay.

He said the Department didn't have authority to automatically update the rule for EAP, or the white collar exemption to the rule requiring time-and-a-half overtime pay. Effective Dec. 1, the enhanced pay was to be required for all making less than $47,892 annually, up from $23,600. This vastly expanded the pool eligible and had prompted some companies to increase pay for some so they would now be exempt. Reuters said this impacts 4 million workers.

It won't happen now.

Mazzant wrote:

The State Plaintiffs have established a prima facie case that the Department’s salary level under the Final Rule and the automatic updating mechanism are without statutory authority.
Mazzant stopped short of agreeing with the challengers' argument that application of federal labor standards overtime requirement to sovereign states violated the Tenth Amendment. He made his ruling apply nationwide. Some 20 states, including Arkansas Attorney General Leslie Rutledge, had fought the rule, along with business interests.

More to come from many sources on this, but plans made by employers nationwide have now been upended. No word yet on an appeal. With the Trump administration only two months away, I'm guessing the chances of this change taking place are not high.

Here's the judge's order.
Congress has been considering legislation to delay the rule and other efforts were underway. Some in business said the old minimum needed changing, but not a doubling. Donald Trump said during the campaign he was open to changing many regulations viewed as harmful to business.

Rutledge commented in a prepared statement:

“Today’s injunction is an important victory that will help protect countless Arkansas business owners, nonprofits, sheriffs, mayors and county judges from increased costs and forced layoffs,” said Attorney General Rutledge. “Many across our State have expressed grave concerns about how they would continue to operate if the rule took effect next week. I am grateful to Judge Mazant for granting this important injunction until the full legality of the rule can be determined, and I hope the Department of Labor will ultimately reconsider this ill-advised rule.”
She made no reference to employees who might have been helped.

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