A federal judge has issued an injunction against U.S. Labor Department’s new overtime rule that was scheduled to go into effect in December.
The new rule would have qualified millions more Americans for overtime pay (time-and-a-half), including many working retail in the active lifestyle industry.
The rule change now stands in limbo and on shaky ground. While the Obama administration could appeal the ruling, a resolution is unlikely before the incoming Trump administration takes control of the Labor Department in January, which could ultimately drop any appeal or amend the rule. Trump has cited the rule as an example of an overreach by the Obama Administration.
The new overtime rule would have raised the minimum annual salary exemption that employers have used to avoid paying overtime. That minimum, currently at $23,600 would have been raised to $47,476, meaning that anyone making less than the new minimum would have qualified for time-and-a-half overtime pay for working more than 40 hours a week.
Proponents of the rule change accused many businesses of unfairly using the lower minimum (which hasn’t changed since the 1970s) to name their employers “managers,” pay them a low annual salary, then work them many overtime hours. Opponents to the rule change said the new law would impose undo stress to many businesses, forcing more time-sheet paperwork and effectively reduced paid hours for employees.
The National Retail Federation and U.S. Chamber Commerce campaigned against the rule change along with 21 state attorney generals, which ultimately filed suit, landing the decision in court.
