U.S. District Judge Amos Mazzant issued a preliminary injunction blocking implementation of a Labor Department rule that would have required businesses to pay overtime to employees making less than $47,476 a year. Currently the threshold is $23,660 per year.
Mazzant’s ruling effectively pauses implementation of the overtime rule change until the courts reach a final decision on its legality.
“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, senior vice president for government relations at the National Retail Federation. “The rules are just plain bad public policy, and we are pleased that the judge is allowing time for the case to go forward before they can go into effect. We hope the judge ultimately finds in our favor, and in the meantime this timeout gives Congress a chance to take another look at the impact of these rules.”
Research conducted for NRF by Oxford Economics found that the new overtime regulations would force employers to limit hours or cut base pay in order to make up for added payroll costs, leaving most workers with no increase in take-home pay despite added administrative costs.
The lawsuit brought by NRF and more than 50 business organizations argues that both the $47,476 annual minimum salary for workers to be exempt from overtime set by the new overtime rules – more than double the current level – and the automatic increase in that amount every three years exceed the Labor Department’s statutory authority under the Fair Labor Standards Act and are in violation of the intent of Congress.
“We welcome today’s ruling,” said Evan Armstrong, vice president for government affairs at the Retail Industry Leaders Association said on Tuesday. “As RILA has argued since the final rule was announced earlier this year, the DOL over reached beyond their authority increasing the threshold too much, too fast. We will continue to monitor the appeal process with a focus on ensuring that employees are able to maintain the flexibility and upward mobility that they value.”