A federal judge in Texas has blocked the U.S. Department of Labor’s final overtime rule. The Nov. 22, 2016, decision by U.S. District Judge Amos Mazzant III in Sherman, Texas, is considered a victory for 21 states and dozens of business groups that sued stating the new rule would increase government costs in their states by $115 million next year and would cost private employers millions of dollars more, possibly leading to layoffs, according to a report in Bloomberg.
U.S. Department of Labor (DOL) Wage and Hour Division’s final overtime rule stated that employees who earn $47,476 per year are eligible as hourly employees rather than salary and will be paid overtime compensation for hours worked over the 40-hour limit. This new rule will also update the salary threshold every three years based on wage growth over time. It would have become effective Dec. 1, 2016.
U.S. Chamber of Commerce Senior Vice President of Labor, Immigration and Employee Benefits Randy Johnson issued the following statement regarding the decision to grant a preliminary injunction blocking the new overtime regulation nationwide:
“We are very pleased that the court agreed with our arguments that the Obama administration’s new overtime rule was unlawful and stopped rule from taking effect on Dec. 1. If the overtime rule had taken effect, it would have resulted in significant new costs – more than $1 billion according to the Congressional Budget Office – and it would have caused many disruptions in how work gets done. Furthermore, the rule would have reduced workplace flexibility, remote electronic access to work and opportunities for career advancement. This is a great result.”