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Tuesday, March 26, 2019

(Reuters) – A federal judge on Tuesday blocked an Obama administration rule to extend mandatory overtime pay to more than 4 million salaried workers from taking effect, imperiling one of the outgoing president’s signature achievements for boosting wages.

U.S. District Judge Amos Mazzant, in Sherman, Texas, agreed with 21 states and a coalition of business groups, including the U.S. Chamber of Commerce, that the rule is unlawful and granted their motion for a nationwide injunction.

The rule, issued by the Labor Department, was to take effect Dec. 1 and would have doubled to $47,500 the maximum salary a worker can earn and still be eligible for mandatory overtime pay. The new threshold would have been the first significant change in four decades.

It was expected to touch nearly every sector of the U.S. economy and have the greatest impact on nonprofit groups, retail companies, hotels and restaurants, which have many management workers whose salaries are below the new threshold.

The states and business groups claimed in lawsuits filed in September, which were later consolidated, that the drastic increase in the salary threshold was arbitrary.

On Tuesday, Mazzant, who was appointed by President Barack Obama, ruled that the federal law governing overtime does not allow the Labor Department to decide which workers are eligible based on salary levels alone.

The Fair Labor Standards Act says that employees can be exempt from overtime if they perform executive, administrative or professional duties, but the rule “creates essentially a de facto salary-only test,” Mazzant wrote in the 20-page ruling.

The states and business groups that challenged the rule applauded the decision.

Nevada Attorney General Adam Paul Laxalt said in a statement that the ruling “reinforces the importance of the rule of law and constitutional government.”

The Labor Department said it strongly disagrees with the decision. It remains confident that the entire rule is legal, and it is currently considering its options, department spokesman Jason Surbey said.

The Labor Department can appeal to the New Orleans, Louisiana-based 5th U.S. Circuit Court of Appeals, but that court has stymied the Obama administration before, blocking Obama’s executive actions on immigration in 2015.

In any case, the Labor Department could drop the appeal after Republican President-elect Donald Trump takes office in January.

In August, Trump told the website Circa that the overtime rule was an example of the type of burdensome business regulations he would seek to roll back as president, perhaps by exempting small businesses or delaying implementation.

Even if the rule survived the legal challenge, it could be upended by legislation passed by Congress or withdrawn by Trump’s Department of Labor.

U.S. Chamber of Commerce official Randy Johnson said in a statement that the rule would have been costly and disruptive to businesses.

But Ross Eisenbrey of the left-leaning Economic Policy Institute, which supported the rule, called the decision “extreme and unsupportable.”

“It is also a disappointment to millions of workers who are forced to work long hours with no extra compensation, and is a blow to those Americans who care deeply about raising wages and lessening inequality,” Eisenbrey said in a statement.

The case is Nevada v. U.S. Department of Labor, U.S. District Court for the Eastern District of Texas, No. 16-cv-731.

(Reporting by Daniel Wiessner and Robert Iafolla; Editing by Alexia Garamfalvi and Leslie Adler)

IMAGE: With the Washington Monument looming in the background, a crew works on the roof of the newly constructed United States Institute of Peace in Washington January 21, 2010.   REUTERS/Kevin Lamarque

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6 responses to “Judge Blocks Obama Administration Rule Extending Overtime Pay”

  1. Otto T. Goat says:

    Judge smacks down Obama’s executive overreach.

    • charleo1 says:

      So in other words, how dare the President try to get those thousands of under paid workers the overtime pay their clearly due! It’s obviously not American.
      On the other hand, working for peanuts, or for nothing at all, is very patriotic!

  2. 1standlastword says:

    A federation of agencies that grow their profits from a salaried labor force is fearful that profit sharing will commit economic injury to their agency so they opt to commit economic injury to workers and their families instead because they don’t have to value a salaried labor force that they presume it is expendable

    On the other end, they conspire with U.S. lawmakers to make sure workers don’t unite so that workers can’t demand their right to fair wages.

    They say that the market should decide salary levels and that government shouldn’t impose its will arbitrarily upon the agency.

    History avails that when the market improves and profits double- triple the only increase for the salaried worker is increased hours while wages remain stagnant.

    So as agency’ profits increase, salaried worker hours increase while wages remain constant. The problem here is at least two-fold: (1) For the workers their salaried wage actually goes down when profits go up and (2) For the agency, this is not a moral problem worthy of concern: That is clearly communicated here.

    • charleo1 says:

      It’s what the blue collar hourly workers perceive as the, quote, “rigged system.” The truth as you probably know, has a lot more to do with labor law history in this Country straight from its conceptions. Or more accurately, the lack of any provisions for the governmental instituting of much of any laws concerning labor. Including, but not limited to, slave labor, forced labor, child labor, or labor of any manner, hour, or condition, as being purely determinate on the fellow paying for it. Even when he decided he’d rather pay it out in company script. The upshot being, if the workers in this land expect their government to step in and replace the trade unions in helping them get better wages, provided healthcare, and some vacation time, they’r going to be mighty disappointed. And probably even more angry. But employers with automation, and the ability to shop the World for the best labor prices, aren’t really all that concerned. They know the precedence of law greatly favors them. And as this latest attempt by the DOL demonstrates, the government is simply not equipped to replace workers themselves doing the hard work of collectively organizing in order to leverage that considerable power in effecting the kind of profit supported wage increases they’re entitled to.

  3. PrecipitousDrop says:

    The current threshold employers use to avoid overtime pay is $23, 946 per year, or about $460 per week. A restaurant manager for a chain restaurant can be salaried at, say, $25,000 per year, and wind up working 50 to 60 hours every week with no compensation for the additional hours. If this worker is married to a retail manager for a chain store like Walmart or Target, they could, together, earn about $50,000 before taxes. If their management duties require more than 40 hours on the job, they receive no additional compensation for their additional costs of child care, and they cannot use the additional work hours to take on a second job that will, actually, pay them for their labor.
    Ever wonder why the median household income for most cities or states is around $50,000?
    This is why.
    It’s the Chamber of Commerce and the Republican Party telling us they’ll support excess profits over labor every day of the week. It’s also their way of making certain the middle class becomes poor.

  4. missygreen says:

    1 yr ago I decided to leave my old work and i couldn’t be happier now… I started doing a job from home, for a company I found on-line, for a few hrs a day, and I make much more than i did on my previous job… Last check i got was for Nine thousand bucks… Awesome thing about it is that now i have more free time to spend with my family…

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