A federal judge has halted changes to federal overtime rules that would have taken effect on Dec. 1. Judge Amos Mazzant of the U.S. Court for the Eastern District of Texas issued a preliminary injunction on Nov. 22 in a lawsuit brought by the National Retailer Federation along with Attorneys General of 21 states and over 50 business lobbies.
The plaintiffs contend the rule changes are unlawful. The ruling is temporary in that it puts the new rules on hold until the court reaches a final decision.
“We are pleased that Judge Mazzant has enjoined the Department of Labor’s new overtime rule, which set an arbitrarily high salary threshold for employees covered by the ‘white collar’ exemption to the overtime requirements of federal law,” said American Trucking Associations President and CEO Chris Spear in a statement.
Spear said that “by doubling the threshold from its current level of $23,660 to $47,476,” the new overtime rule “would have forced millions of salaried professionals to be treated like hourly employees.
“In the trucking industry,” he added, “the rule change would have affected countless salaried dispatchers and other managers who need the flexibility to work as the need arises, in response to unpredictable operational demands. At the same time, it would have forced the carriers they work for to begin micromanaging their time.”
National Retail Federation Senior Vice President for Government Relations David French called the overtime changes “a reckless and aggressive overreach of executive power.”
He characterized the Labor Department’s changes as “just plain bad public policy… We hope the judge ultimately finds in our favor, and in the meantime this timeout gives Congress a chance to take another look at the impact of these rules.”
According to NRF, research conducted for it by Oxford Economics found that the new overtime rules “would force employers to limit hours or cut base pay in order to make up for added payroll costs, leaving most workers with no increase in take-home pay despite added administrative costs.”
NRF said the lawsuit argues both that the $47,476 annual minimum salary for workers to be exempt from overtime set by the new overtime rules, more than double the current level, and the automatic increase in that amount every three years exceed the Labor Department’s statutory authority under the Fair Labor Standards Act and are in violation of the intent of Congress.