A move on the part of the Department of Labor to increase the amount of money employees can earn doing overtime has been rejected by a federal court.
The U.S. District Court for the Eastern District of Texas has ruled that the Labor Department went beyond its authority in refiguring the salary cap for overtime eligibility under the Fair Labor Standards Act.
As proposed, the Labor Department action would have increased the salary threshold to just under $44,000, effective this past July. A second scheduled increase called for the threshold to be increased to $58,656 beginning next January.
In his ruling, U.S. District Judge Sean Jordan said the Labor Department had exceeded its own authority because it relied too much on salary to determine if an employee should be exempt from overtime, rather than looking at the exact duties of any given job.
By federal law, hourly workers are entitled to overtime pay if they put in more than 40 hours a week. But salaried workers have long been excluded from that requirement.
When the Labor Department action was announced, Julie Su, acting director of that agency, said it would expand “overtime protections for our nation’s lower-paid salary workers.” She added that the action would mean “more money in these workers’ pockets and a little more breathing room.”
The ruling was in response to a suit earlier filed by the Restaurant Law Center and the Texas Restaurant Association. Opponents of the Labor Department ruling contended that many employers would find it burdensome to satisfy the new requirements.
In a statement, David French, executive vice president for government relations with the National Retail Federation, said the proposed changes “would have curtailed retailers’ ability to offer the most flexible, generous and tailored benefits package to lower-level exempt employees across the industry.”
Analysts have said that in normal circumstances, the Labor Department would appeal the District Court ruling but given that only less than two months remain before the beginning of a new presidential administration such an appeal seems unlikely.
November 26, 2024
By Garry Boulard
Photo courtesy of Unsplash
