UPDATE, September 6, 5:15 p.m.: The Department of Justice officially abandoned an Obama-era rule to extend overtime benefits to 4 million workers, announcing Tuesday it will not defend the rule after a federal judge struck it down last week.
A Texas judge on Thursday shot down an Obama-era labor rule, ending the immediate hopes of overtime pay for 4.2 million workers, most of them women and people of color.
The rule would’ve doubled an overtime salary threshold that dates back to 2004, making workers who earn less than $47,476 a year newly eligible for time-and-a-half pay for working more than 40 hours in a week.
U.S. District Court Judge Amos Mazzano wrote in his decision that the Labor Department improperly looked at salaries rather than job descriptions to determine a worker’s eligibility for overtime pay, as Bloomberg BNA reported. Last year, Mazzano granted a temporary stay to the rule, which had been set to go into effect in December 2016, but was tied up in legal challenges brought by business groups and nearly two dozen states.
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Previously, workers earning less than $23,660 qualified for overtime pay. Women and people of color stood to benefit the most from the higher overtime threshold, an analysis by the Economic Policy Institute noted.
Seth D. Harris, deputy labor secretary in the Obama administration, called Thursday’s ruling “wrongly decided.” Sen. Sherrod Brown (D-Ohio) demanded the president and Labor Secretary Alexander Acosta make good on their pledge to protect U.S. workers and appeal the judge’s decision.
“Overtime pay has been out of date for years, and it’s past time workers’ paychecks reflect the hours they work,” Brown, who authored a resolution urging the Trump administration to defend the overtime rule, said in a statement. “This decision is a huge disappointment to millions of workers who were promised a raise and their families.”
Acosta, however, has described the Obama era rule as a “shock to the system.” The Labor Department is asking for public comments on the rule, signaling it won’t support the $47,476 salary threshold.
Christine Owens, executive director at the National Employment Law Project, argued that the department fully vetted the overtime rule. Nearly 300,000 people commented—most in the support of the higher salary threshold. Dropping the overtime threshold, she said, hurts workers.
“For working people across America heading into the Labor Day weekend, the challenge by big business to the rule and this judge’s decision is one more reminder of how the rules are rigged in favor of corporate interests—and against ensuring that all who work for a living will make a decent living from work,” Owens said in a statement.