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Labor Department drops bid to revive Obama overtime pay rule

06 September 2017

Texas federal District Judge Amos Mazzant's new ruling returns the overtime salary cutoff to $455 per week ($23,660 per year), rather than $913 per week ($47,476 annually.) The Labor Department under Obama had objected to the judge's decision to put the matter on hold last December.

Ten days before the overtime rule was to take effect, the Texas district court issued a nationwide temporary injunction arguing that the DOL had exceeded its authority by doubling the salary threshold. In an email, the president of American Bridge accused Trump of trying to "further rig the economy for the rich".

NFIB and the 55 other business groups filed suit in the U.S. District Court for the Eastern District of Texas last September to block implementation of the rule. Legal observers said the ruling does leave wiggle room for the agency to use such a standard moving forward, albeit at lower levels than the massive hike envisioned by the Obama administration.

President Obama and his labor secretary, Thomas Perez (who now chairs the Democratic Party), wanted more workers to be eligible for overtime.

Just because the DOJ decided not to pursue the pending appeal doesn't mean its lawyers won't appeal Mazzant's latest decision, sources on both sides of the debate told Bloomberg BNA. "This will allow the U.S. Department of Labor time to consider input from the business community to enact workable changes to these regulations".

The timeline for the overtime rule saga started on May 18, 2016, when DOL published its final rule amending the exemptions tests for executive, administrative, and professional employees under the Fair Labor Standards Act.

At the core of the Obama administration's revamped overtime rules would have been an increase in the salary threshold under which certain workers would be guaranteed time-and-a-half pay when they worked more than 40 hours in any given week. "However, the Department creates a Final Rule that makes overtime status depend predominately on a minimum salary level, thereby supplanting an analysis of an employee's job duties". "Because the final rule would exclude so many employees who perform exempt duties, the department fails to carry out Congress' unambiguous intent".

"This opinion is not making any assessments regarding the general lawfulness of the salary-level test or the Department's authority to implement such a test", Mazzant wrote in the recent decision.

Labor Department drops bid to revive Obama overtime pay rule