Last week, a federal judge in Texas slapped a nationwide injunction on the overtime regulation introduced by the Obama administration. The rule would have made roughly 4 million workers eligible for time-and-a-half overtime pay.
“It would raise the salary limit below which workers automatically qualified for overtime pay to $47,476 from $23,660,” writes “The New York Times.”
At the request of 21 states, the U.S. Chamber of Commerce and other groups– Judge Amos L. Mazzant III has blocked the regulation just in time as it was to take effect on December 1.
So why the injunction?
Judge Mazzant believes that the Obama administration took advantage of its authority by raising the salary limit so high, without it being granted by congress.
Specifically, the rule "exceeds its delegated authority and ignores Congress's intent by raising the minimum salary threshold such that it supplants the duties test,” said Mazzant. "If Congress intended the salary requirement to supplant the duties test, then Congress and not the Department, should make that change.”
According to the Labor Department, this rule would cost the country’s businesses $295 million per year.
Those in opposition argue this would be detrimental to businesses and would result in less hours for workers. But those in favor of the rule, believe employees working long hours should be given extra compensation.
Although this is temporary, the rule could be suspended indefinitely.
“We are, assuming that this preliminary injunction holds and there isn’t an appeal or some other thing that disrupts it, done with this regulation,” said Marc Freedman, executive director of labor law policy at the U.S. Chamber of Commerce.
President-elect Donald Trump consistently said he wants less regulation on small business and plans to limit them.
But, some new form of overtime limit may be passed in the next year.
“Still, because undoing the regulation could have required a months- or years long rule-making process similar to the one that produced it, the new overtime limit appeared likely to survive in some form. Some business lobbyists had anticipated a legislative compromise that phased in the new limit over a longer period of time and eliminated an automatic increase in the limit every three years,” writes “The New York Times.”