A federal judge in Texas has invalidated an Obama-era overtime rule that was aimed at giving millions more Americans a shot at earning overtime pay.
The rule, proposed by former President Barack Obama’s Labor Department, doubled the salary threshold for workers to qualify for overtime pay, from $455 per week to $913 per week. The Labor Department estimated that the rule would have benefited an additional 4.2 million workers.
21 states including Texas filed suit against the DOL, requesting emergency injunctive relief enjoining the government from implementing the new regulations, which were scheduled to become effective on December 1, 2016.
In addition to the suit by the States, the Plano Chamber of Commerce and more than 55 other business groups also filed suit challenging the rule.
The business groups moved for expedited summary judgment, seeking to have the rule invalidated. The federal judge consolidated the cases, eventually blocked the rule and dismissed the case with prejudice.
Opponents of the rule argued it was too broad because it was based on the salary threshold. Making the change in that manner overlooks the fact that some workers in the salary range perform management duties, making them ineligible for overtime, opponents said.
“I applaud the court’s ruling, which represents a victory for the American worker and prevents an unlawful revision of the Fair Labor Standards Act,” said Marc Rylander, communications director for the Office of the Attorney General of Texas. “The Overtime Rule limits workplace flexibility without a corresponding increase in pay and forces employers to cut their workers’ hours,” Rylander said. “This was one of the many egregious examples of federal overreach that occurred during the Obama era.”
Former Labor Secretary Tom Perez, who now head the Democratic National Committee, had said at the time that the lawsuit led by Paxton and others was “obstructionist.”
"Despite the sound legal and policy footing on which the rule is constructed, the same interests that have stood in the way of middle-class Americans getting paid when they work extra are continuing their obstructionist tactics," Perez said last year.