A new overtime rule planned to go into effect Dec. 1 was blocked by a federal judge on Tuesday while reviewing a challenge to the requirement. The rule would make millions of Americans eligible for overtime pay where they previously were not.
The rule was released by the Labor Department in May, and was expected to raise the threshold of eligibility for overtime pay for employees from $23,660 to $47,476. U.S. District Judge Amos Mazzant of the Eastern District of Texas blocked the rule, which will affect an estimated 4.2-million workers. Mazzant’s decision stems from his belief that by setting the automatic salary increase, “the department exceeds its delegated authority and ignores Congress’s intent.”
Critics of the rule were not scarce; twenty-one states challenged the doubling of overtime eligibility claiming it would hurt small businesses and increase labor costs. “This is a victory for small business owners and should give them some breathing room until the case can be properly adjudicated,” Juanita Duggan, CEO of the National Federation of Independent Business, said in a statement.
The NFIB is one of several entities challenging the new rule, but opposition to the rule change is not uniform. Christie Owens, head of the National Employment Law Project, said in a statement that blocking the increase will continue to hurt workers in the long term, particularly because overtime laws haven’t been updated since 2004.
“Unfortunately, for the time being, workers will continue to work longer hours for less pay thanks to this obstructionist litigation," Owens said.
Employers spent the last several months preparing for the legislation by raising employee salaries to the new threshold or converting salaried employees to hourly workers. But even if the rule had been spared an eleventh-hour intervention at the hands of Mazzant, it’s future was still in limbo. President-elect Donald Trump has vowed to dissolve a number of business regulations enacted during the Obama administration.