Texas judge blocks Obama’s overtime rules

Pay standards were imposed by Obama administration

President Barack Obama’s bid to expand overtime pay protections for millions is thwarted just days before it was to take effect.

Millions of low-paid supervisors would have become eligible for overtime pay next week, but a federal judge in Texas blocked that path Tuesday, ruling that Congress intended duties, not wages, to determine eligibility for overtime and minimum wage.

U.S. District Judge Amos Mazzant, sitting in Sherman, issued an emergency preliminary injunction to stop overtime rules adopted by the Obama administration from taking effect on Dec. 1 as scheduled. The 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).

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.

In September, the Plano Chamber of Commerce along with more than 50 other business groups filed a lawsuit opposing the new overtime rules. That case was consolidated with the lawsuit brought by the 21 states.

Texas Attorney General Ken Paxton hailed Mazzant’s decision, arguing that the Obama administration’s overtime rules would hurt American workers.

“It limits workplace flexibility without a corresponding increase in pay and forces employers to cut their workers’ hours,” Paxton said in a statement. “All in all, it exchanges the advantages of negotiated benefits, personal to each worker, with a one-sizefits-all standard that only looks good in press statements.”

Employment lawyers said that the ruling doesn’t mean that the rules will be 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, Mazzant said.

“After reading the plain meanings together with the statute, it is clear Congress intended the EAP (executive, administrative, professional) exemption to apply to employees doing actual executive, administrative, and professional duties,” he wrote in his opinion. “In other words, Congress defined the EAP exemption with regard to duties, which does not include a minimum salary level.”

“It limits workplace flexibility without a corresponding increase in pay and forces employers to cut their workers’ hours.” Ken Paxton, Texas attorney general