A 2015 rule aimed at extending overtime pay eligibility to over 4 million Americans has been defeated by a federal judge in Texas. Originally due to take effect December 1, 2016, the Obama-era rule roughly doubled the current salary eligibility limit from $23,660 to $47,476. Hourly workers under the threshold would be eligible for time-and-a-half wages after 40 hours weekly.

 

U.S. District Court Judge Amos Mazzant III, in response to lawsuits filed by business advocates and 21 states, blocked the rule last November. Now, with his August 31, 2017, judgment, he put the final nail in its coffin.

 

While the rule sounded like a coup for workers (while arguably a wage burden for small businesses), its ambiguity regarding employee roles left a gaping loophole that—if exploited—would be both unfair to employees and constitute a government overreach. The latter is largely why Judge Mazzant ruled as he did.

 

Employees designated as executive, administrative, or professional were to be exempt from overtime eligibility under the rule—even if their earnings remained below the increased threshold. However, wages alone were the consideration, and not job duties. The judge explained, “If Congress was ambiguous about what specifically constituted an employee subject to the [executive, administrative and professional] exemption, Congress was clear that the determination should involve at least a consideration of an employee’s duties.”

 

Further, the new rule would have opened up the floodgates for salary threshold changes every three years—a potential job-killing labor cost increase that Judge Mazzant called “unlawful.”

 

While many across a variety of industries agree overtime pay rules should be overhauled, the interest is in maintaining a sustainable system that encourages both growth and fair compensation, and without government overstepping its actual authority. This is particularly appealing to those in the restaurant industry where hours and duties fluctuate regularly, and even more so during some seasons. The Department of Labor is already tasked with revisiting overtime regulations, and organizations such as the National Restaurant Association have lauded both the legal decision to strike down the Obama-era rule as well as the opportunity to start over and compose regulations that will be better received and hold up to court challenge.

 

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