Judge Blocks Department of Labor Rule Extending Overtime Pay

U.S. District Judge Amos Mazzant, in Sherman, Texas on Tuesday blocked a Department of Labor rule to extend mandatory overtime pay to more than 4 million salaried workers from taking effect. The judge sided with 21 states and a coalition of business groups, including the U.S. Chamber of Commerce, that the rule is unlawful and granted their motion for a nationwide injunction.

The rule was to take effect Dec. 1 and would have doubled the maximum salary a worker can earn and still be eligible for mandatory overtime pay from $23,660 to $47,476. The new threshold would have been the first significant change in four decades.

It was expected to touch nearly every sector of the U.S. economy and have the greatest impact on nonprofit groups, retail companies, hotels and restaurants, which have many management workers whose salaries are below the new threshold.

The states and business groups claimed in lawsuits filed in September, which were later consolidated, that the drastic increase in the salary threshold was arbitrary.

Mazzant ruled that the federal law governing overtime does not allow the Labor Department to decide which workers are eligible based on salary levels alone.