Government, Human Resources, and Law

Judge blocks federal overtime rule

November 23, 2016
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Kurt Graham. Courtesy Mika Meyers

A federal judge has blocked the long-anticipated mandatory overtime pay rule that was set to take effect Dec. 1, making thousands of local workers and millions nationwide eligible for time-and-a-half pay for hours worked past 40.

U.S. District Judge Amos Mazzant in the Eastern District of Texas ruled to grant a preliminary injunction against the rule in response to the objections of 21 states and the District of Columbia that it was unlawful.

The rule was set to raise the threshold at which executive, administrative and professional employees are exempt from overtime to $47,476 from $23,660.

According to Reuters, the judge ruled that the federal law governing overtime does not give the U.S. Department of Labor the authority to raise the salary threshold to determine exempt status.

Kurt Graham, an employment attorney with Mika Meyers in Grand Rapids, said the court ruled that the current statute regarding the salary threshold is “clear and unambiguous.”

“The court said the Department of Labor tried to clarify a rule that it had no business to clarify,” he said. “The long and short of it is the rule improperly created the salary test for determining who was exempt, and (it said) they didn’t have any business creating that high of a threshold.”

Graham said the injunction, which was issued to prevent implementation of the rule until the matter can proceed to court for a final decision, is a nationwide stay even though the suit was brought in Texas.

“Essentially, it’s an injunction to say that the case still has to proceed,” Graham said. “It’s the court saying we can’t enforce the rule right now because we think the case has merit and (the rule) likely will be overturned.”

Graham said he expects any appeal in favor of the rule, which “99 percent” of the attorneys he knows believed would pass, now will “die a slow death,” as the Republican-controlled Congress and Republican President-elect Donald Trump all have been in vocal opposition to the change.

Judge Mazzant, Graham said, was appointed by President Obama and many people expected he would decide in favor of the overtime rule or at least be “sympathetic” to it.

“The judge just said, this threshold that you picked out here, you didn’t have the authority to set it so high,” Graham said.

He noted the judge didn’t even need to address the “automatic mechanism” that would update the salary and compensation levels every three years, to which many of the 21 states had objected.

Graham said the Department of Labor is “considering all its options” about whether to appeal the ruling, but either way the case likely will carry over into next year.

“I don’t see it being resolved anytime soon,” Graham said. “I think it’s probably going to take at least a few months.”

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