Millions of low-paid supervisors would have become eligible for overtime pay next week, but a federal judge in Texas blocked that path late Tuesday afternoon, ruling that Congress intended duties, not wages, to determine eligibility for overtime and minimum wage.
U.S. District Judge Amos L. Mazzant, sitting in Sherman, issued an emergency preliminary injunction to stop new overtime rules adopted by the Obama administration from taking effect on Dec. 1 as scheduled. The new rules would have raised the automatic salary threshold for executive, administrative, and professional positions to be eligible for overtime.
Under current rules, white collar workers earning more than $455 a week ($23,660 annually) are not eligible for overtime. The new rules would double that threshold to $921 per week, ($47,892 annually).
The state of Texas and 20 other states requested the injunction after filing suit to prevent enactment of the higher wage thresholds. The states argued they couldn’t afford to pay overtime to employees who were exempt under existing standards. The injunction appears to apply to all employers, including private employers.
[…]
Employment lawyers said that the ruling doesn’t mean that the new rules will get thrown out, but rather stops them from being put into effect while the case is litigated. Stephen Roppolo, a Houston lawyer, said he expects the Labor Department will ask the Fifth Circuit Court of Appeals to step in and overrule the lower court.
“It’s not a done deal,” Roppolo said.
The Labor Department did not immediately respond to a request for comment.
Mazzant noted in his ruling that when Congress enacted the Fair Labor Standards Act in 1938, it did not include a salary threshold. The Labor Department developed a duties test to define which occupations were exempt from overtime. By 1949, the department had incorporated a minimum salary into the formula.
The last time the rules changed was 2004, when white collar workers had to meet three tests to be exempt from overtime: they had to be paid a salary, earn at least $455 per week and perform executive, administrative or professional duties.
The real focus of Congress was on the duties performed, not salary paid, noted Mazzant.
See here for the background, and here for the opinion. You’d think after an election that was supposedly all about economic anxiety and stagnant wages, a judge blocking an effort to increase the pay for millions of people who currently earn modest salaries, due to the relentless efforts of Attorneys General like Ken Paxton, might be a bit of a political issue going forward. Just a thought. The Trib, Kevin Drum, Nancy LeTourneau, and the Current have more.
The best way to raise wages for low paid folks is……supply and demand. Get rid of the illegal aliens that work harder, for less. That leaves employers left with legal people who can command more money for those jobs, since there is less competition for them.
Funny how we don’t need a new edict from government to solve the problem, just insisting the government perform one of its most basic functions works just fine.
In fact, the proposed rule is a prime example of government ineptitude. Government is failing at a basic task, so it proposes more government to fix the problem government itself has caused. I guess Uncle Sam is “too big to fail.”
@Bill, this has nothing to do with minimum wage, but the rules governing when employers have to quit making their workers act like slaves by making them work huge numbers of hours. Reducing the number of illegals won’t change the fact that many employers treat their employees like crap, and the employees have little choice but to take the abuse. Do you think it’s OK for an employer to misclassify a worker to avoid paying overtime? Do you think it’s reasonable for an employer to make employees work off the clock to avoid overtime? Your pie in the sky Randian thoughts wold be great in a perfect world, but not in a world where the employers have all of the power.
@Ross:
Yes, and yes. If we were in a full on, communist system, where there was only one employer and an individual was not allowed to change jobs or start their own business, then I would agree with you. That isn’t the case. Look at Tom Herman over at UH. He doesn’t think he’s making enough at UH, he shops his skill set to LSU, UT and others, then moves to a job where he is satisfied with the pay and working conditions.
How is this different from a front line manager at Subway, who feels he/she puts in too many hours for what he/she is being paid? That front line Subway manager can shop his/her skill set to other companies, or even open a taco truck food stand. That manager can also tell Subway, “hey, I’ve got an offer for xx from another employer, do you want to negotiate to keep me here?”
The days of “the company store” have passed. No one is stuck anywhere. This is what the “fight for $15” people just don’t get. Would you pay more than the going rate for your car insurance? Would you pay a little extra for your property tax, just because? Would you pay you lawn service more than the going rate for lawn cutting? If not, why do you expect employers to pay more?
An employer who consistently pays below average wages is going to get frequent turnover, low morale, and probably poor performance by the employees. A smart employer would pay enough to get and keep quality employees. Ever been to a place with poor service? Did you go back? You as the customer have a vote on whether the company’s employees are being compensated and treated fairly, just as the employees themselves have.
@Bill, you don’t live in the same world I do. The people I know who work in jobs that are likely to be misclassified usually just suck it up because they can’t afford to quit and be without a job for a few months. They also are afraid that by quitting, they will get a reputation that they are trouble, and no one will hire them, since they have to put previous employers on the application, and the employers talk to each other.