Judge blocks new overtime rule

New Overtime Pay Rule Blocked

(USA TODAY) -- A federal judge on Tuesday blocked a new rule making millions more Americans eligible for overtime pay, indefinitely pushing back the Dec. 1 effective date while he weighs a challenge to the requirement.
 
The decision by U.S. District Judge Amos Mazzant in the Eastern District of Texas to grant a preliminary injunction affects an estimated 4.2 million workers who were to be newly eligible for time-and-a-half wages for each hour they put in beyond 40 a week.
 
2 On Your Side spoke with local labor attorney Amy Hemenway, she said employers should proceed as if the law goes into effect Dec. 1 "a cautious employer would want to proceed with those changes so that it's not caught in a position where it didn't implement changes, so that if  the law is found lawful and applied retroactively and you have a period of time where employees are not paid properly."
 
The rule, released by the Labor Department in May, would nearly double the threshold at which executive, administrative and professional employees are exempt from overtime to $47,476 from $23,660.
 
Twenty-one states challenged the overtime expansion, arguing that Congress never intended to set any salary threshold for the exemptions or to allow the threshold to be raised every three years, as the Labor Department’s rule specifies.
 
“This is a victory for small business owners and should give them some breathing room until the case can be properly adjudicated,” said Juanita Duggan, CEO of the National Federation of Independent Business, which is separately challenging the requirement.
 
Small business and other trade groups have argued the overtime rule would swell labor costs and force employers to demote managers to hourly employees, hurting morale, among other hassles.
 

 


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