On August 31, a Texas federal judge struck down the controversial Obama-era overtime rule that would have extended overtime pay to more than 4 million workers, dramatically changing the way countless industries across the country conduct business.

U.S. District Judge Amos Mazzant put the overtime rule on hold temporarily before it went into effect late last year, and Thursday’s ruling proved to be another nail in the controversial rule’s coffin. Mazzant ruled that U.S. Department of Labor had exceeded its authority and improperly used a salary-level test, instead of job descriptions, when determining whether a worker should be eligible for overtime compensation.

The rule would have required employers to pay overtime to any employee salaried at less than $47,476 annually, a sharp increase from the current salary limit of $23,660. More than 55 business groups challenged the 2016 rule, stating that it set the pay threshold too high and made it extremely difficult for employers and their employees to set flexible work schedules.

Manufacturers and business groups like the Restaurant Law Center dubbed the Obama-era regulation “anti-business” and an “[overstep] of [the Obama administration’s] authority.” The Obama administration refuted these assertions, stating that the rule was a way to combat wage stagnation for working families, at a time when Congress was not likely to raise the federal minimum wage.

The salary threshold was last updated in 2004 by the Labor Department under George W. Bush. Paul DeCamp, the former administrator of the department’s Wage and Hour Division during the Bush’s administration, told Bloomberg BNA, “Judge Mazzant is not saying you can’t have a salary level. He’s just saying that the salary level in this rule was too high.”

While Mazzant appeared to acknowledge that the DOL has the authority consider salary levels to a certain extent, he also stated that the department cannot “categorically exclude” workers from the white-collar exemption “based on salary level alone.”

Mazzant’s ruling could pave the way for the Trump administration to issue a new rule with a more moderate increase to the salary threshold.

Sources: https://www.bna.com/texas-judge-kills-n73014463988/

http://thehill.com/homenews/administration/348752-texas-judge-strikes-down-obama-overtime-rule

https://m.qsrmagazine.com/news/texas-judge-strikes-down-overtime-rule