A federal judge in Texas has granted a preliminary injunction stopping the imposition of changes to the overtime provisions of the Fair Labor Standards Act (FLSA). The long-anticipated changes, which had been scheduled to take effect December 1, would require paying overtime to most workers making less than $47,476 a year, roughly double the current wage threshold.
U.S. District Judge Amos Mazzant III, appointed by President Obama, ruled in favor of two sets of plaintiffs in two separate cases – one brought by business interests and one brought by 21 states – that were combined in his court. The 20-page order granting the injunction found that the U.S. Labor Department likely attempted to do by administrative rule something that requires Congressional action. The judge wrote that “[t]he State Plaintiffs have shown a likelihood of success on the merits because the Final Rule exceeds the Department’s authority.”
Fortune magazine quoted from the order in its reporting that “The Fair Labor Standards Act says that employees can be exempt from overtime if they perform executive, administrative or professional duties, but the rule ‘creates essentially a de facto salary-only test.’”
The Obama administration has the option of appealing the preliminary injunction to the Fifth Circuit Court of Appeals in New Orleans, and it’s possible that the appeals court could remove the preliminary injunction. However, even if the appeals court were so inclined (and that’s not a sure thing, given the court’s conservative reputation and its anti-administration rulings on executive actions and immigration), the calendar is not working in the administration’s favor. December 1st is only eight days away. Donald Trump has promised to halt execution of many Obama administration executive orders. Moreover, the incoming Congress would likely move legislation such as that introduced by Democrats last summer – legislation President Trump may well sign – modifying and delaying implementation of the FLSA’s overtime provisions. Republicans in Congress could even go so far as to pass legislation specifically restricting the Labor Department’s rule-making authority in setting wage thresholds for overtime pay.
NPQ has discussed the overtime rule and its moral and financial implications for nonprofits many times. Judge Mazzant’s order does not pass judgment on whether more workers should receive overtime pay; it only says that Congress, not a Cabinet department, is likely the appropriate venue to make major changes on the matter of who is eligible for overtime pay and how eligibility is calculated under existing law. – Michael Wyland