Court Blocks Federal Overtime Rule, Effectively Killing It

Court Blocks Federal Overtime Rule, Effectively Killing It

A federal judge issued a temporary restraining order preventing the new federal overtime regulation from going into effect on Dec. 1, which has resulted in killing it.

The rule was challenged in court by 21 state governments and more than 50 associations that represent employers in a wide range of industries.

Their lawsuit said that the U.S. Department of Labor exceeded its statutory authority and violated congressional intent by setting the $47,476 annual minimum salary for workers to be exempt from overtime and decreeing that amount would automatically increase every three years.

This effectively renders the overtime changes dead because President-Elect Trump’s new administration can be expected to drop the federal government’s case defending the rule or settle in favor of the employers, and eventually rescind the rule along with others that were established as the result of executive orders issued by President Obama.

The federal court action is only the most recent decision handed down by district courts located in Texas that have frustrated President Obama’s plans. Other Texas district courts have blocked his immigration amnesty executive order and most recently stayed DOL’s “Persuader” rules from going into effect.

Adopted at the behest of unions, the “Persuader” rule would have required companies to file reports with DOL and would be publically available, revealing any arrangements and payments made with outside labor consultants and attorneys.

DOL was quick to express its unhappiness with the most recent court decision blocking the overtime rule, declaring, “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.”

A spokesman for the U.S. Chamber of Commerce said, “We are very pleased that the court agreed with our arguments that the Obama administration’s new overtime rule was unlawful and stopped the rule from taking effect.”

Another group that was party to the lawsuit, National Federation of Independent Business, also hailed the court action. Juanita Duggan, NFIB’s president, called the injunction “a victory for small business owners and should give them some breathing room until the case can be properly adjudicated.”

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Material Handling & Logistics is an IndustryWeek companion site within Penton's Manufacturing & Supply Chain Group.

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