Sherman Federal Judge blocks nationwide Dept. of Labor overtime ruling

The Obama backed overtime pay extension was set to go into effect on December 1.

A federal judge blocked the president’s overtime reform on Tuesday, siding with representatives from 21 states, a coalition of business groups and the U.S. Chamber of Commerce against the legislation.

The department had estimated the rule change would have made millions of workers eligible for overtime pay.

Business Wire reports the nonpartisan Congressional Budget Office recently found that canceling the overtime changes would benefit consumers by avoiding price increases that would come if companies had to pay their workers more.

Dozens of business groups that sued with the states said the overtime rule would have hurt retailers and other small businesses by adding to labor costs and forced employers to convert full-time jobs to part-time.

The extra pay would have aided 4.2 million Americans – many of whom would have voted for Donald Trump – as it doubled the threshold of eligibility for overtime pay for people who earn an annual salary to $47,476 and work more than 40 hours per week.

This is historically out of line with past increases to overtime salary thresholds.

The new rule will raise the salary threshold from $455/week to $913, or $47,476, the federal agency says on its website. The salary requirement was last updated in 2004.

Currently, salaried employees who are paid more than $455 a week can be deemed “managers” even if they have little in the way of supervisory duties.

Twenty-one states challenged the overtime expansion, arguing that Congress never meant to set any salary threshold for the exemptions or to allow the threshold to be raised every three years, as the Labor Department’s rule specifies.

“This was a critical step in what we hope will be a positive outcome in the case against the Department of Labor”, said Cicely Simpson, the NRA’s executive vice president of government affairs and policy.

As long as your annual income is less than the threshold, your hourly wage gets bumped up to time-and-a-half whenever you work more than 40 hours per week.

Employers shouldn’t assume, however, that the overtime rule will be permanently barred. But the judge said the increase to the 40th percentile of all weekly earnings in the US effectively eliminated the exception in labor law for “bona fide executive, administrative or professional” employees. On Tuesday, major lobbies for industries immediately hailed the judge’s ruling, while workers rights groups said it would delay much-needed reforms from taking effect.