School Bus Contractors

Court Puts New Overtime Rule on Hold

Thomas McMahon
Posted on November 29, 2016
A revision to federal regulations that would make more workers eligible for overtime pay was slated to go into effect on Dec. 1, but a federal judge has granted a nationwide preliminary injunction. Photo by Barry Johnson
A revision to federal regulations that would make more workers eligible for overtime pay was slated to go into effect on Dec. 1, but a federal judge has granted a nationwide preliminary injunction. Photo by Barry Johnson

AUSTIN, Texas — A federal judge here has granted a nationwide preliminary injunction against the U.S. Department of Labor’s new overtime rule.

The new overtime rule more than doubles the salary threshold in which workers are entitled to overtime pay. Opponents have said that the change would force many state and local governments and private businesses to substantially increase their employment costs.

“The finalized overtime rule hurts the American worker,” said Texas Attorney General Ken Paxton, who is co-leading a 21-state coalition against the regulation change. “It limits workplace flexibility without a corresponding increase in pay and forces employers to cut their workers’ hours. All in all, it exchanges the advantages of negotiated benefits, personal to each worker, with a one-size-fits-all standard that only looks good in press statements.”

In granting the injunction on Nov. 22, U.S. District Judge Amos Mazzant wrote that “the Final Rule … is contrary to the statutory text and Congress’s intent” and “Congress, and not the Department [of Labor], should make that change.”

An article published in the November issue of School Bus Fleet explained the new overtime regulation, which was supposed to go into effect on Dec. 1, and provided potential strategies for school bus contractors that would be impacted by the change.

Now, because of the court’s injunction, the new rule is on hold and will not take effect on Dec. 1 as scheduled.

“A preliminary injunction preserves the status quo while the Court determines the Department’s authority to make the Final Rule as well as the Final Rule’s validity,” Judge Mazzant wrote.

It remains to be seen whether the rule will be upheld and go into effect at a later date. In the meantime, the minimum salary earned by employees to be exempt from overtime pay stays at $455 per week, rather than the final rule's increased rate of $913 per week.

The court’s preliminary injunction can be found here.

The Avitus Group, a human resources management firm, has provided answers to employers’ questions about the halted overtime rule here.

Related Topics: legal issues

Thomas McMahon Executive Editor
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