What Will Become of Obama’s Overtime Rule?
On December 1, 2016, millions of American workers were slated to receive overtime pay, thanks to the Obama Administration’s finalized overtime rule under the Department of Labor. The rule says anyone who makes less than $47,476 per year must receive time-and-a-half pay for hours worked beyond 40 hours a week. The change is authorized under the Fair Labor Standards Act. This doubled the past threshold of $23,660, and constitutes one of the most sweeping reforms that Obama has made to boost slow-growing incomes. The intent was to strengthen the middle-class.
According to the Department of Labor, that made 4.2 million salaried workers newly eligible for overtime pay, which is approximately 35% of salaried workers in this country.
Unsurprisingly, this overtime rule was challenged by business and industry interests and denounced by Republican lawmakers. A federal judge in Texas blocked the rule shortly before the overtime rule was set to take effect after 21 states and a coalition of business groups (including the U.S. Chamber of Commerce) filed suit to block the overtime rule.
U.S. District Judge Amos Mazzant granted their motion for preliminary injunction based on the plaintiff’s argument that the overtime rule exceeded the scope of the DOL’s regulatory rule-making authority. In his 22-page ruling, Mazzant held that federal law governing overtime does not allow the Department to decide which workers are eligible based on salary levels alone. Had the overtime rule not been blocked, it would have taken effect on December 1, 2016.
Now What?
During his campaign, Trump made public statements that Obama’s overtime rule was an example of over-regulation that burdens businesses and economic growth. Now that Trump is president, the future of the Overtime Rule looks dire.
Under the Congressional Review Act, Republicans are slated to undo Obama-era regulations finalized on or after June 13, 2016. Because the Overtime Rule was finalized in March, they cannot use the CRA to undo the rule.
As to the lawsuit, the Department of Labor can appeal to the New Orleans, Louisiana-based 5th U.S. Circuit Court of Appeals. However, the Department under a Trump Administration can be ordered to drop the appeal, in which case, the rule will never materialize for the Americans who were depending on it for overtime pay.
Alternatively, the Trump Administration could also propose a new regulation undoing the old one. Congressional Republicans could also introduce legislation permanently blocking the rule. If it passes Congress, it can then be signed into law by the new president. Some sources however, state that a more likely scenario is that Congress will use legislation to lower the threshold instead of killing it outright, since it is such a popular rule.
Texas Employment Law Attorneys
If you are unsure what your rights to overtime pay are in Texas, or whether your employer is treating you fairly, reach out to a skilled and experienced employment law attorney in the Fort Worth, Texas area. Contact one of our attorneys to discuss your specific situation today.
