A federal court is blocking implementation of a regulation that would make an estimated 4 million more higher-earning workers eligible for overtime pay.
The U.S. District Court in the Eastern District of Texas granted a nationwide preliminary injunction Tuesday that prevents the Department of Labor from implementing the changes until the rule’s legality can be further examined. The order comes after 21 states sued to block the rule before it took effect on Dec. 1.
As the rules currently work, companies can avoid paying overtime to full-time salaried employees making as little as $23,660 by classifying them as “exempt.” Those workers aren’t entitled to overtime pay, even if they work more than 40 hours a week.
The law that was set to go into effect on Dec. 1 would change that threshold to $47,500, meaning many more would be eligible. The salary threshold will be updated every three years. Based on projections, it is expected to rise to $51,000 by January 1, 2020, after the first update.
The lead plaintiff was Nevada Attorney General Adam Laxalt, who’s a frequent critic of what he calls Obama Administration overreach.
The regulation would shrink the so-called “white collar exemption” and more than double the salary threshold under which employers must pay overtime to their workers.
Laxalt said the rule would burden private and public sectors.
Gov. Dan Malloy disagrees, and was upset over the ruling.
“It is deeply disappointing that any action would be taken to delay expanding overtime protections that would strengthen and grow the working class while also boosting our economy. It is a bedrock principle of our nation that workers and their families deserve a fair wage for their hard work,” he said in a statement.
U.S. Secretary of Labor Thomas Perez said after the original lawsuit was filed in September that he was confident in the legality of the rule, calling the lawsuit a partisan and obstructionist tactic. He noted that overtime protections have receded over the years. They applied to 62 percent of U.S. full-time salaried workers in 1975 and just 7 percent today.
With reporting by the Associated Press and CNN.
