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Judge shoots down Department of Labor overtime rule

September 01, 2017

An overtime rule that caused concern among employers, including staffing firms, was shot down Thursday by a federal judge in Texas.

The rule targeted overtime pay for employees who work in an “executive, administrative or professional capacity.” Under current regulations, those employees must receive a salary of at least $455 per week, or $23,660 annually, or an employer must pay overtime. The new rule would have raised that salary requirement to $913 per week, or $47,476 annually.

It’s estimated the rule would have made 4.2 million more people eligible for overtime.

Judge Amos Mazzant in his order said the department exceeded its authority by making salary level so high.

“The final rule more than doubles the previous minimum salary level,” Mazzant wrote. “By raising the salary level in this manner, the department effectively eliminates a consideration of whether an employee performs ‘bona fide executive, administrative or professional capacity’ duties.”

The rule had been set to take effect Dec. 1, but 21 states sued to stop it. It had been on hold since November, but is not permanently invalidated.

An appeals court had been considering that injunction, and HR Dive reported an attorney said Thursday’s decision was largely “beating a dead horse” because the Trump administration was already considering a lower salary level.

Nevada Attorney General Paul Laxalt, who led the charge against the rule, lauded the decision.

“I applaud Judge Mazzant’s decision to permanently invalidate this Obama-era overtime rule that would have would have imposed millions of dollars of unfunded liabilities on the states and resulted in a loss of private sector jobs as well as onerous financial and regulatory burdens on small businesses in Nevada and around the country,” Laxalt said in a statement.

However, Christine Owens, executive director of the National Employment Law Project, said the rule was the result of two years of work, including a comment period when nearly 300,000 comments were submitted to the Department of Labor.

“Today’s decision by Judge Mazzant strips hard-earned, long overdue overtime pay protections from millions of America’s workers forced to put in extra hours on the job – away from their families – with no extra pay at all,” Owens said.