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-171
No comments:
Post a Comment