President Barack Obama’s Department of Labor put forward a new rule in 2015 targeting small businesses that essentially doubled the minimum threshold by which salaried workers would be exempt from overtime pay. Like many new rules put forward by the administration, it was challenged in the courts.
According to The New York Times, judge Amos Mazzant III of the Eastern District of Texas, an Obama appointee to the federal bench, issued a nationwide injunction against the rule Tuesday that effectively prevented it from being implemented on Dec. 1 as planned.
The rule, which would have mostly affected white-collar workers in salaried managerial or supervisory positions, would have raised the threshold by which those workers would be exempt from hourly worker overtime rules from $23,660 to $47,476 per year, meaning more of these workers would have to be paid overtime for extra hours worked, which would have had a huge negative economic impact.
A coalition of small business groups and the U.S. Chamber of Commerce filed suit, claiming the new rule would cost small businesses upwards of $12 billion in additional overtime pay per year. Their suit was combined with one filed by a coalition of 21 states arguing that the Obama administration had overstepped its bounds yet again, according to The Washington Times.
“The Labor Department’s overtime changes are a reckless and aggressive overreach of executive power, and retailers are pleased with the judge’s decision,” said David French of the National Retail Federation.
Judge Mazzant agreed that the Labor Department had exceeded the authority granted it by Congress and issued the temporary injunction pending a future final decision on the merits of the case.
“Congress defined the … exemption with regard to duties, which does not include a minimum salary level,” wrote Judge Mazzant in his decision. “The department’s role is to carry out Congress’ intent. If Congress intended the salary requirement to supplant the duties test, then Congress, and not the department, should make that change.”
Another argument against the broadly sweeping rule was that it didn’t take into consideration regional differences in cost of living or pay standards, setting up a one-size-fits-all yardstick more suitable for New York or Los Angeles than for small cities and rural areas.
“I am pleased that a federal district judge has, yet again, pumped the brakes on another harmful regulation from the Obama administration,” Oklahoma Sen. James Lankford said. “This federal overtime rule is devastating … but particularly in states with a low cost of living.”
“The economic realities and regional cost-of-living differences that exist throughout the country were completely ignored by the Department of Labor on this proposal,” Lankford added. “I am hopeful that this rule can be brought back to the drawing board for a new rule-making process that works for the entire nation.”
To be sure, any such changes should be something for Congress to work out legislatively in a manner that takes regional differences and varying standards into consideration, not for a group of un-elected and unaccountable bureaucrats to decide on their own.
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H/T The Daily Caller