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Court Enjoins Labor Department From Enforcing New Overtime Rule

Posted On: 11/23/2016

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TAGS: overtime rules, U.S. District Judge Amos Mazzant, salary threshold, overtime pay, Labor Department overtime regulation

SHERMAN, TX -- U.S. District Judge Amos Mazzant of the Eastern District of Texas has granted the request of 21 states and a coalition of business groups for an injunction against the Labor Department's rule on overtime pay that was scheduled to take effect on Dec. 1, 2016.

The rule raises the salary threshold below which overtime pay is mandatory from $455 to $913 a week ($23,660 to $47,476 per year). Employees earning less than that threshold would be entitled to overtime, regardless of their duties. Thus, the exemption from overtime for employees performing executive, administrative or professional duties (the "EAP exemption") no longer would apply to workers earning less than $913 a week.

Judge Mazzant ruled that the new Labor Department regulation exceeds the authority delegated to it by Congress. He found that this authority gives the department the power to define which workers are considered "salaried" only on the basis of the duties they perform, not how much they earn.

Business groups have estimated that the new rule will cost them $12 billion a year if it is allowed to take effect, and they applauded the judge's decision.

"The National Automatic Merchandising Association is thankful for the industry's tremendous grassroots effort opposing this regulation and seeking a reasonable legislative solution," said Eric Dell, the association's senior vice-president for government affairs.

"The Labor Department's overtime changes are a reckless and aggressive overreach of executive power," added David French, the National Retail Federation's senior vice-president for government relations. "Retailers are pleased with the judge's decision."

The case is State of Nevada, et al, v. United States Dept. of Labor, et al. Judge Mazzant's decision can be downloaded as a press release issued by the U.S. Chamber of Commerce here.