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Published: Tue, November 29, 2016
Economy | By Melissa Porter

Millions may now lose eligibility for overtime after ruling

Millions may now lose eligibility for overtime after ruling

A rule created to extend overtime pay to more than four million Americans was blocked by the federal court in Texas Tuesday night.

Set to take effect December 1, the rule would have doubled to $47,500 the maximum salary a worker can earn while being eligible for mandatory overtime pay.

As the rules work now, companies can avoid paying overtime to full-time salaried employees making as little as $23,660 by classifying them as "exempt". However, the U.S. Chamber of Commerce withstood against the rule's implementation as it would "substantially increase the labor costs of. nonprofit employers and state and local governments".

Business groups had argued the rule would lead to layoffs and some employees had looked forward to mor overtime, bigger paychecks, especially during the holiday rush.

With Republicans controlling both houses in Congress and the Trump administration set to take office in less than two months, the new overtime rule's long-term future remains in limbo.

The Department of Labor projected more than 4 million people would be seeing a pay raise.

"We strongly disagree with the decision by the court, which has the effect of delaying a fair day's pay for a long day's work for millions of hardworking Americans", the labor department said in a statement.

"What the President-elect characterized as a "burden" is in fact the most basic workplace protection", Shields said.

Mezzant said Congress meant to create an exemption from the overtime rule in the Wage and Hour laws for employees who were in the executive, administrative and professional categories.

The overhaul will affect workers across all sectors, including those in postdoctoral research whose pay falls below the overtime limit. Others said that some workers would be assigned fewer hours.

If the labor department lawyers appeal Tuesday's ruling, they could end up facing a Supreme Court that includes some Trump appointees. But as a practical matter, and from an employee morale perspective, "it's very challenging to take it back", said Thomas Linthorst, an employer-side attorney at the law firm Morgan Lewis.

Opposition to the court's ruling has surfaced. While the December 1 effective date is now no longer mandated for employers because the injunction temporarily blocks the regulation, the future of the Final Rule remains uncertain. "We are now considering all of our legal options", the DOL said in a statement. Thus, the exemption from overtime for employees performing executive, administrative or professional duties (the "EAP exemption") no longer would apply to workers earning less than $913 a week.

Carpenter spent a good part of this year helping his clients figure out how to deal with the new rule.

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