Posted by: maboulette | December 3, 2016

Lost Overtime Pay


A judge in Texas has issued a preliminary injunction against President Obama’s new overtime rule that gives 4 million salaried employees overtime pay. 


President Obama has spent 8 years going around an uncooperative Congress by using executive orders en masse and reportedly instructed government agencies such as the Department of Labor to change federal regulations.  This overtime rule was one in a very long line of executive power manuvers.


Together 21 states, joined by the U.S Chamber of Commerce, National Retail Federation and other such organization, petitioned a federal court to block the O.T. rule, arguing that the Obama administration had overstepped its authority.  On November 22nd, District Judge Amos Mazzant took the side of the states. His order put the new overtime rule on hold while Obama and the Dept. of Labor study their options.


If this rule had gone into effect on Dec.1, it would have made over 4 million salaried employees entitled for overtime pay.  It doubled the threshold for overtime from $23,660 to $47,476.


With the judge’s ruling coming right at the last minute, many businesses had already enacted plans to comply.  Some businesses where employees were close to the new $47,476 mark had simply made places to bump up paychecks.  This is not to say that a few additional hours would not come with that extra money.


Some companies in the fast food and retail industries would have demoted entry-level managers back to hourly status, which would potentially stripped them of other benefits. These are companies that needed to maintain a static bottom line with minimum wage employees filling in the gaps.  Basically, those aspiring to be managers would have likely lost a foothold into better paying management careers.


The National Federation of Independent Businesses reports that this change would have negatively affected more than 5.5 small businesses. But now with this rule in limbo, the legal and the political implications seem to be that the new overtime rule is dead in the water.


This basically will be left for the Trump administration to decide about the rule.  During the campaign Trump was asked many times his position on the change.  His response was indifferent and he only stated that he want to protect small businesses.  Trump can instruct the Dept. of Labor to drop participation in the lawsuit and agree to let the judge’s order stand without appeal which enables Congress and Trump to strike down the rule without lifting a finger.

This is another example of the battle between Obama Administration and Congress during the last 8 years.   On this one the American worker has unfortunately been caught in the crossfire.


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