Prior to 2016, there has not been a major overhaul to overtime regulations since 2004, when the maximum salary a worker could earn and still be automatically eligible for overtime pay was $23,660. President Obama worked to change that by supporting legislation that would have nearly doubled the old maximum to $47,000 and, as a result, extend overtime benefits to nearly 4 million U.S. workers. U.S. District Judge Amos Mazzant in Sherman, Texas, placed a stay on the legislation pending his final decision in 2016. That final decision has finally been made.
Judge Mazzant ruled against the Obama administration, siding with the business groups and 21 states that challenged it by striking down the overtime rule. Many businesses felt that the Obama legislation overstepped the boundaries of government and forced businesses to provide overtime to lower-level management workers, who should have been exempt.
[Charles Symington, senior vice president of external, industry and government affairs for the the Independent Insurance Agents & Brokers of America (Big “I”) issued this statement:
“Last year the Big ‘I’, working with a number of other business groups, was the only insurance trade association to sue the Department of Labor (DOL) for promulgating an overreaching and overly complex rule on overtime pay. The Big ‘I’ is pleased to announce that a motion for summary judgment has been granted to invalidate the rule. The court decision is a win for Big ‘I’ members and their employees across the country and acknowledges the negative impacts the rule could have had on small businesses and their workers had it gone into effect. The Big ‘I’ looks forward to continuing to work with the DOL and the Trump Administration to pursue appropriate small business regulation, and to ensure that any potential, future changes to the overtime rule are workable.”]
The final decision made it clear that, although the Labor Department does have the authority to use a salary test, the base eligibility for overtime pay on a combination of workers’ duties and wages. Just how big an impact will this have on small businesses around the U.S.? Time will tell.