LAS VEGAS (AP) — In a blow to the Obama administration’s labor-law plans, a federal court has blocked the start of a rule that would have made an estimated 4 million more American workers eligible for overtime pay heading into the holiday season.
As a result of Tuesday’s ruling, overtime changes set to take effect Dec. 1 are now unlikely be in play before vast power shifts to a Donald Trump administration, which has spoken out against Obama-backed government regulation and generally aligns with the business groups that stridently opposed the overtime rule.
The U.S. District Court in the Eastern District of Texas granted the nationwide preliminary injunction, saying the Department of Labor’s rule exceeds the authority the agency was delegated by Congress.
“Businesses and state and local governments across the country can breathe a sigh of relief now that this rule has been halted,” said Nevada Attorney General Adam Laxalt, who led the coalition of 21 states and governors fighting the rule and has been a frequent critic of what he characterized as Obama administration overreach. “Today’s preliminary injunction reinforces the importance of the rule of law and constitutional government.”
The regulation sought to shrink the so-called “white collar exemption” that allows employers to skip overtime pay for salaried administrative or professional workers who make more than about $23,660 per year. Critics say it’s wrong that some retail and restaurant chains pay low-level managers as little as $25,000 a year and no overtime — even if they work 60 hours a week.
Under the rule, those workers would have been eligible for overtime pay as long as they made less than about $47,500 a year, and the threshold would readjust every three years to reflect changes in average wages.
The Department of Labor said the changes would restore teeth to the Fair Labor Standards Act, which it called “the crown jewel of worker protections in the United States.” Inflation weakened the act: overtime protections applied to 62 percent of U.S. full-time salaried workers in 1975 but just 7 percent today.
The agency said it’s now considering all its legal options.
“We strongly disagree with the decision by the court, which has the effect of delaying a fair day’s pay for a long day’s work for millions of hardworking Americans,” the labor department said in a statement. “The department’s overtime rule is the result of a comprehensive, inclusive rulemaking process, and we remain confident in the legality of all aspects of the rule.”
The ruling dealt a major blow to the Obama administration’s effort to beef up labor laws it said weren’t keeping pace with the times.
Opponents fought hard against the rule, saying it would increase compliance costs for employers who would have to track hours more meticulously and would force companies to cut employees’ base pay to compensate for overtime costs that kick in more frequently.
“This overtime rule is totally disconnected from reality,” said Karen Kerrigan, president and CEO of the Small Business and Entrepreneurship Council. “The one-size-fits-all doubling of the salary threshold demonstrated ignorance regarding the vast differences in the cost-of-living across America.”
The court agreed with plaintiffs that the rule could cause irreparable harm if it wasn’t stopped before it was scheduled to take effect next week.
The Department of Labor could appeal the Tuesday ruling, which might end up at a Supreme Court that includes some Trump appointees.
But the injunction takes political pressure off the incoming administration at an opportune time, according to labor law professor Ruben Garcia of UNLV’s Boyd School of Law. With no new overtime changes kicking in Dec. 1, Trump can accept the status quo and won’t have to risk angering workers by walking back overtime benefits shortly after employees start receiving them.
His administration could choose to make its own rule changes through the lengthy administrative process. Or Congress could amend labor laws.
The impending rule wasn’t front and center in the presidential campaign, but Trump did tell the news site Circa in August that he would love to see a delay or carve-out for small businesses in the overtime regulation. Republican House Speaker Paul Ryan was more vocal against it, saying it would be an “absolute disaster” for the economy and was being rushed through by Obama to boost his political legacy.
Copyright 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Yeah, but, you know, it’s all OK because both sides are the same. No difference. Lesser of two evils. Totally equivalent.
Unions will be dismantled, pays will decrease…the Rapist administration will be heavily pro-business. and in the end, we, the ordinary joe, will be fucked over…as usual.
So how are the white middle class unemployed and under employed in the rust belt feeling about Trump and Republicans now? Trump is more concerned about the view for his 2 gold courses in Scotland than he is about jobs and the middle class.
As Colin Powell said in one of his hacked email messages, “Hillary screws everything up”. He is so correct…she isn’t corrupt or a crook as the Republicans and their very conservative corporate owned mainstream media brain washed into Americans…she just screws up. And now the American worker, especially in Ohio, Michigan, Indiana, and Wisconsin are in for the screwing of their life. We’ve all seen the anger and violence and attacks by the deplorables during the campaign and now right after the rigged electoral college…what will Trump’s stirred up deplorables do once they wake up and realize the raper in chief is a complete fraud and he has no plan to bring the jobs back!
Well, Trump did claim Americans make too much money, so I’m sure his actions will remedy that.
American voters are idiots.
If like Bernie, the Democrats actually listened to the rural and urban middle class and poor, they would have won the White House, Senate, and the House in a landslide.
Start with jobs…Bill Clinton, Bush, followed by Obama have done nothing to create jobs or development programs for displaced workers in industries like obsolete coal…training to be qualified for the new sources of energy like solar.
The DNC totally ignored the fact that the US has an over population crisis…323 plus million is too many for our once wide open land mass. Immigration reform must be part of a plan to gradually reduce the US population back to sustainable levels. Obama and Clinton totally ignored this message that the middle class wants addressed!
Then we have the upside down tax system…where Donald Trump and billionaires can get away without paying any (ZERO) income taxes in 18 years!
Obama was a big disappointment: he lied about reversing NAFTA, he lied about ending the needless and expensive wars, he lied about fisxing the financial system following the Geroge Bush Financial crash. No bank execs were prosecuted and the Dems failed to restore Glass-Steagall with updates for things like CDO’s (derivatives).
Then we have Obamacare…and how Obama himself could be so wrong about its implementation. He lied to the middle class.
If the DNC doesn’t wake up and realize they have lost their way, the Democrats are done for good. Bernie was the right man, with the right message, and with the right plans for government policy to change the direction of the nation.
Now we have a rapist in Chief…and Obama owns as much blame as Hillary for this deplorable result.