Economy

Texas judge strikes down Labor Department's overtime rule

Texas judge strikes down Labor Department's overtime rule”

The Justice Department will no longer fight to preserve President Barack Obama's attempted overtime hike that a federal judge declared invalid in August.

Progressive groups reacted swiftly to the Trump administration's decision. When the DOL rolled out the new rule in 2015, then-Labor Secretary Thomas Perez said doubling the threshold was the easiest way to put more money in workers' pockets and avoid some of the uncertainty that comes with the "duties test".

Provider groups had opposed the rule, which also would have adjusted the salary threshold for the affected executive, administrative and professional employees every three years. It was to have taken effect December 1, 2016, but a delay in implementation was granted until the case was heard. The department creates a final rule that makes overtime status depend predominately on a minimum salary level, thereby supplanting an analysis of an employee's job duties. If implemented, the salary level under which employees qualify for overtime pay would have increased from $455 per week ($23,360 annually) to an estimated $913 per week ($47,476 annually).

The Obama DOL appealed the injunction.

It is not 100 percent clear which of these two options the Trump administration would choose to pursue. They argued that the overtime rule would have disrupted many small employers who could not be ready by the deadline.

"The Department of Labor under the previous administration overstepped its authority in making changes to the federal overtime rule".

The Obama administration's controversial overtime rule is now dead in the water. With the injunction appeal pending, the Texas district court ruled on the plaintiff's motion in favor of the businesses and states that challenged the rule. The DOJ initially asked the U.S. Court of Appeals for the Fifth Circuit to affirm its authority in the overtime matter. "The department's overtime rule is the result of a comprehensive, inclusive rulemaking process, and we remain confident in the legality of all aspects of the rule".

Now that Mazzant has issued a permanent ruling on the overtime rule changes, the DOL appeal to the Fifth Circuit is effectively moot since the District Court in Texas possessed jurisdiction to determine the final merits while the Obama-era appeal was pending. The Mazzant decision granting summary judgment came in the case of State of Nevada v. U.S. Department of Labor.



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