Rachel Greszler
Employers and workers may not realize it, but they just dodged a bullet.
They can thank a federal judge in Texas who just tossed out a Biden administration rule that tried to increase the salary threshold for overtime pay by 65%, from $35,568 to $58,656 per year (a range that includes about 12 million workers). That new threshold would have exceeded the earnings of more than 70% of workers in lower-cost states like Arkansas, Mississippi, South Dakota and West Virginia.
The same thing happened in 2017, when a federal judge in Texas tossed out a virtually identical overtime rule from the Obama administration. In both cases, the court ruled that the Department of Labor overstepped its authority by violating Congress’ intent for overtime exemptions to be based on workers’ duties—not just their salaries.
This is an obvious relief for employers, who were grappling with the prospect of having to increase millions of workers’ pay by as much as 65%.
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And it’s a less obvious relief for workers and consumers. That’s because, despite the Biden administration’s promotion of the rule as raising the pay of millions of workers, the rule’s costly mandates would have unleashed a whole host of unintended consequences.
The overtime salary threshold is the minimum amount employers must pay their salaried employees for them to be exempt from being subject to overtime rules. Overtime rules require employers to pay workers 1.5 times their usual pay for any hours over 40 that they work in a given week. (Employees must also, first and foremost, meet a duties test—performing sufficiently self-directed work—to be considered exempt from overtime pay.)
The Department of Labor estimated that its rule—which was finalized in April and went into effect with a partial increase in the threshold to $43,888 on July 1—would affect more than 4 million workers, » Read More
https://www.heritage.org/jobs-and-labor/commentary/federal-judge-invalidates-overtime-rule-threatened-millions-workers-and