Federal judge blocks mandatory overtime pay law

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A federal judge on Tuesday blocked a federal rule that was to extend mandatory overtime pay to 4.2 million salaried workers, according to a Reuters report. The law would have gone into effect on Dec. 1.

Twenty-one states and a coalition of business groups including the U.S. Chamber of Commerce sued the federal government in September, saying the salary threshold increase was arbitrary. On Tuesday, U.S. District Judge Amos Mazzant of Sherman, Texas, granted a motion for a nationwide injunction.

The U.S. Department of Labor Department can appeal to the 5th U.S. Circuit Court of Appeals in New Orleans, but the agency could wind up dropping the appeal after Republican President-elect Donald Trump takes office in January.

The Department of Labor rule would have:

  • Raised the salary threshold indicating eligibility from $455 per week to $913 per week ($47,476 per year)
  • Automatically updated the salary threshold every three years, based on wage growth over time
  • Strengthened overtime protections for salaried workers already entitled to overtime

The Fair Labor Standards Act (FLSA) says that employees can be exempt from overtime if they perform executive, administrative or professional duties. In proposing the change, President Barack Obama said the threshold associated with the so-called “white collar” exemptions has not kept up with the modern economy

But Mazzant ruled Tuesday that the FLSA does not allow the Labor Department to decide which workers are eligible based on salary levels alone.

The salary threshold rule would affect about 9,200 South Dakota workers, according to the White House.