Obama administration appeals ruling blocking overtime pay rule

Obama administration appeals ruling blocking overtime pay rule

The Obama administration on Thursday challenged [notice of appeal, PDF] a federal judge’s decision [opinion, PDF; JURIST report] to block the implementation of a new overtime pay rule [text, PDF]. The Department of Labor (DOL) [official website] filed a notice of appeal in the Eastern District of Texas [official website]. The new rule would have made [NPR report] 4 million more Americans eligible for overtime pay. The rule [DOL report] requires employers to pay overtime to employees who worked more than 40 hours in a week and earned less than $47,476 a year. Twenty-one states sued to block the rule and the district court issued an injunction. Regardless of the outcome for the appeal, the future of the rule is uncertain as the incoming Trump administration has already discussed ending the measure.

In May the White House announced [Business Insider report] that the DOL would raise the salary threshold for overtime pay to $47,476 a year or $913 a week. The “new Overtime Rule,” as it is referred to by challengers, was promulgated by the DOL and its Wage and Hour Division to update salary and compensation standards as well as to provide guidelines for determining who qualifies for exemption from from the FLSA minimum wage and overtime pay protections. The regulation raises the bar for exemption by doubling the baseline salary requirement and implementing a “duties test.” The change has widespread implications [Forbes report] for businesses and nonprofits that must either raise wages for employees or pay overtime compensation. The Obama administration has maintained that the new rule will improve the lives of workers while businesses and Republicans have criticized [SHRM report] the rule stating that it will “hurt the lowest paid American workers the most.” In June the US Supreme Court ruled [JURIST report] in Encino Motorcars v. Navarro [SCOTUSblog materials] that it could not rely on the DOL’s interpretation of a statute on overtime pay, sending the case back to the lower court. In September Texas and Nevada filed suit [JURIST report] on behalf of 19 other states against the DOL challenging the regulation.