A Texas judge on Tuesday blocked President Obama's new rule intended to force companies to pay workers more overtime, agreeing with businesses that the administration overstepped its authority and that only Congress could approve such an expansion of the federal overtime law.
Business groups cheered the emergency injunction for the expansion, which was scheduled to start Dec. 1. "This is a victory for small business owners and should give them some breathing room until the case can be properly adjudicated," said Juanita Duggan, president of the National Federation of Independent Business, a small-business trade group that opposed the rule.
Federal law says employees must be paid time-and-a-half once they work more than 40 hours in a week. However, businesses may exempt workers from the requirement if their duties are "managerial" in nature and they reach a certain salary threshold.
In May, the Labor Department announced that that threshold, previously $23,000 annually, would rise to more than $47,000 on Dec. 1, and would be updated every three years to reflect wage growth. The administration's rule change would have meant that 4 million more workers would be eligible for overtime. Because it was an administrative reinterpretation of the existing Fair Labor Standards Act, the White House said that the change did not require congressional approval.