Federal Overtime Rule Delayed; Federal Judge In Texas Delays Change That Would Have Benefited White-Collar Employees Earning Less Than $48,000

A federal judge in Sherman, Texas, blocked a Labor Department rule that would have expanded overtime protections to more workers as of Dec. 1.

U.S. District Judge Amos Mazzant issued a nationwide preliminary injunction against the rule, which he said improperly creates a salary test to determine who is protected by the Fair Labor Standards Act’s “white collar” exemption.

The rule, challenged by business groups and 21 state attorneys general, would require employers to pay overtime to salaried workers earning less than $47,476 a year, more than double the current threshold of $23,660, which has not been updated since 2004.

The ruling represents the fourth time in less than two years a federal judge has blocked one of President Barack Obama’s initiatives nationwide, Bloomberg noted. Others involved shielding undocumented immigrants from deportation, providing bathroom access for transgender students and requiring federal contractors to disclose labor violations.

The 20-page decision “preserves the status quo while the court determines the department’s authority to make the final rule as well as the final rule’s validity.” It rejected a request by the federal government to limit the ruling to the 21 states that opposed it.

“If Congress intended the salary requirement to supplant the duties test, then Congress and not the department, should make that change,” the judge said, adding that regional differences hadn’t been taken into account nor considered the ability of smaller public and private entities to pay higher salaries.

The states argued the Obama administration had usurped Congress’ prerogative to set minimum wages.

The National Federation of Independent Business issued a statement praising the decision, saying it would give business owners “breathing room,” the Hill reported. The federation estimates nearly half of small businesses have at least one employee who would qualify for overtime under the new rule.

“Today’s decision is an important win for all manufacturers in America — halting what would have been a dramatic and devastating change in labor law that manufacturers could not afford,” said Linda Kelly, general counsel for the National Association of Manufacturers.