Texas Judge Blocks New Federal Overtime Rules

In a blow to workers' rights today, U.S. District Judge Amos Mazzant of Sherman, Texas, temporarily struck down a new federal overtime rule that would have impacted 4.2 million American employees, including approximately 370,000 Texans.

The new rule, set to go into effect nationwide on Dec. 1, would have doubled the maximum salary an employee working more than 40 hours per week could earn and still be able to receive mandatory overtime pay. Considered one of President Barack Obama’s hallmark legacies, the new rule would have raised the earning threshold to $47,476 ($913/week) from $23,660 ($455/week). The measure sought to improve wage stagnation and make it more difficult for employers to take advantage of their labor force.

However, conservative Texas Attorney General Ken Paxton – in his ongoing quest to sue the federal government at seemingly every turn – and 20 states filed suit against the Department of Labor to fight the rule, alleging the plan forces states, local governments, and private businesses to “substantially increase” their employment costs. The U.S. Chamber of Commerce additionally opposed the rule in a separate suit. “The [Obama] administration assumes that through force of will alone, it could order a new economic reality into existence,” said Paxton in a statement. “The finalized overtime rule hurts the American worker. It limits workplace flexibility without a corresponding increase in pay and forces employers to cut their workers hours. All in all, it exchanges the advantages of negotiated benefits, personal to each worker, with a one-size-fits-all standard that only looks good in press statements. Not on my watch.”

In his 20-page injunction, Mazzant ruled that the Department of Labor overstepped its authority and "ignores Congress's intent" by basing the overtime wages on salary instead of on an employee’s duties: “[I]t is clear Congress intended the EAP exemption to apply to employees doing actual executive, administrative, and professional duties. In other words, Congress defined the EAP exemption with regard to duties, which does not include a minimum salary level."

For an in-depth overview of the new rules and how they would impact local businesses, read last week’s feature, "Welcome to the Working Week-and-a-Half."