A federal judge has blocked the upcoming Department of Labor (DOL) overtime rule instituted by the Obama Administration. The rule was set to take effect Dec. 1, 2016, increasing the salary threshold for overtime eligibility from $23,660 to $47,476. This would have made any workers under the threshold eligible for overtime pay for over 40 hours worked per week.
According to Reuters, “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 group was granted a nationwide preliminary injunction, meaning they were able to prove that the law would cause “irreparable harm” to employers.
“The judge said the Labor Department regulation exceeded the authority granted it by Congress, which he said gave Labor the right to define which workers are considered salaried but only based on the duties they performed, not by how much they made,” according to The Washington Times.
The DOL estimated there would have been approximately 4.2 million workers affected by the new law. Business owners would have been forced to reevaluate their current workforce to meet the requirements.
The Labor Department issued a statement regarding the decision stating, “We strongly disagree with the decision by the court, which has the effect of delaying a fair day’s pay for a long day’s work for millions of hardworking Americans.”
The DOL has the ability to appeal this decision, but the incoming administration can then drop any appeal of the ruling.
One way employers can assure they are keeping up with any changes to the law or other upcoming legislation is by working with a Professional Employer Organization like Group Management Services. We take on the administrative burden, so you can focus on what matters. Contact us today to learn more.