The U.S. Department of Labor (DOL) had issued a rule that would have doubled the maximum salary a worker can earn and still qualify for mandatory overtime pay. Workers earning less than $47,500 would have been eligible for overtime pay. The rule was scheduled to take effect on December 1.
However, 21 states and a coalition of business groups that included the U.S. Chamber of Commerce filed a motion that argued the rule was unlawful. U.S. District Judge Amos Mazzano in Sherman Texas found rule to be unlawful and issued a nationwide injunction regarding it.
In his ruling, the judge stated that federal law governing overtime does not allow the DOL to use salary alone to decide which workers qualify for overtime. He quoted in his ruling that the Fair Labor Standards Act, which states overtime exemption applies for executive, administrative or professional duties but said the rule “creates essentially a de facto salary-only test.”
The DOL still maintains that its rule is legal and is weighing its options for appeal.
President Elect Donald Trump’s Action Regarding the Rule
According to Reuters, Trump said in August that the rule was an example of burdensome regulations he would work to address as president, either by delaying implementation or exempting small businesses.
Other possibilities are that the DOL under Trump would withdraw the rule or legislation by Congress would change it.
Going forward, we will have to see what happens with the overtime rule. In the meantime, employers are relieved about not have to spend greater amounts on paying overtime wages.
Stephen Hans & Associates works with business owners to help them comply with employment laws and protects their rights in employment disputes and other issues.