A federal judge in Texas has issued a preliminary injunction blocking the Obama administration's proposed rule to extend overtime benefits to more workers.
Under the Fair Labor Standards Act, the federal government requires employers—including colleges and universities—to offer overtime pay to employees who earn less than $23,660 per year.
The threshold would have been raised to $47,476 by a new rule that was set to take effect on December 1. A draft of the rule with a slightly higher salary threshold was estimated to affect nearly 900,000 higher education employees. The change would not have affected employees who spend most of their time teaching, as well as certain other employees whose primary job is supporting students, such as some advisors.
Twenty-one states and dozens of business groups filed a lawsuit challenging the new rule, and last week Judge Amos L. Mazzant III of the U.S. District Court in Sherman, Texas put a temporary hold on the change.
In his opinion, Mazzant wrote that the Labor Department "exceeds its delegated authority and ignores Congress's intent by raising the minimum salary threshold such that it supplants the duties test" in issuing the rule. Under the duties test, employees with administrative, executive, or professional duties are ineligible for overtime pay if their wages exceed the salary threshold. Mazzant argued that "if Congress intended the salary requirement to supplant the duties test, then Congress and not the Department, should make that change."
The Justice Department said it is reviewing the ruling and is considering further action. According to CUPA-HR, the Labor Department is likely to make a swift appeal of the ruling, but the timeline for such action is unknown. However, if the rule will now be implemented after the presidential inauguration, "then there will be room for the Trump administration to reopen the rule making and revise the final rule."
"This is an extreme and unsupportable decision and is a clear overreach by the court," says Ross Eisenbrey, vice president of the Economic Policy Institute, which helped the Labor Department develop the rule. Eisenbrey calls the ruling "a disappointment to millions of workers who are forced to work long hours with no extra compensation" and "a blow to those Americans who care deeply about raising wages and lessening inequality."
"We are very pleased that the court agreed with our arguments," says Randy Johnson, the U.S. Chamber of Commerce's senior vice president of labor, immigration, and employee benefits. He says the rule "would have caused many disruptions in how work gets done" and "reduced workplace flexibility, remote electronic access to work, and opportunities for career advancement" (Kreighbaum, Inside Higher Ed; Jaschik, Inside Higher Ed, 5/16; 11/23; DeSantis, "The Ticker," Chronicle of Higher Education, 11/22; Levine, POLITICO, 11/22).
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