By Brandon Moseley
Alabama Political Reporter
Tuesday, November 22, 2016, the United States District Court for the Eastern District of Texas issued a nationwide preliminary injunction blocking a regulation by the outgoing Barack H. Obama administration that would have resulted in employers having to pay overtime to millions of mostly white collar employees. Alabama was one of 21 states to sue to block implementation of the regulation which was to go into effect on December 1.
Alabama Attorney General Luther Strange (R) praised the Federal court decision to grant a preliminary injunction motion to halt the US Department of Labor’s illegal overtime rule. AG Strange said, “Another unlawful Obama administration expansion of authority has been met by a federal court roadblock. The granting of a nationwide preliminary injunction of the new federal overtime rule, just days before its implementation, ensures that cash-strapped state and local governments will not be forced to lay off employees or cut vital services to the public in order to meet this costly federal mandate. I am pleased the federal court granted the motion by Alabama and 20 other states to block the new Obama administration overtime rule and protect many public and private sector jobs.”
US Representative Martha Roby (R-Montgomery) also released a statement praising the decision by Judge Amos L. Mazzant III, a US District Judge in the Eastern District of Texas. Rep. Roby said, “This decision is a conservative victory for the 21 states and dozens of business groups who challenged that this new rule handed down by President Obama’s Department of Labor would increase government costs while costing private employers millions of dollars.”
US Senator Richard Shelby (R) said in a statement, “I have heard from Alabamians all across the State about the harmful impacts that the Obama Administration’s overtime rule would have on small businesses, non-profits, universities, and employees alike. Americans spoke loud and clear about their frustration with these types of unilateral executive regulations that stifle economic growth and opportunity. Yesterday’s ruling is a victory for the American people, and I look forward to working with President-elect Trump and my Republican colleagues to reverse this and other job-destroying rules in the coming months.”
US Representative Bradley Byrne (R-Montrose) said, “This rule was never what the Obama Administration wanted people to believe it was. Instead, the rule would have hurt American workers by moving them from salaried to hourly employees and greatly reducing opportunities for advancement. The rule would have been especially damaging for schools and non-profits, who couldn’t just increase costs to offset the added expenses. I appreciate Judge Mazzant’s decision and look forward to working with the Trump Administration to pursue policies that actually benefit American workers.”
Rep. Roby said, “We all want incomes to rise, but top-down government mandates that ultimately cost workers are not the way to make it happen. We need 21st century workforce policies that offer workers choices and flexibility, and we need to enact them properly through Congress. I’m pleased that the courts have once again rejected the Obama Administration’s attempt to circumvent Congress and legislate by executive fiat. This decision and others like it will help return our country to constitutional order.”
The rule would raise the salary threshold for workers to qualify as exempt from overtime pay requirements from $455 to $913 per week – from $23,660 to $47,476 per year – while increasing the current minimum salary requirements for employees exempt from overtime pay under the “highly-compensated” exemption from $100,000 to $134,004 per year.
Aparna Mathur with the American Enterprise Institute wrote that: “New analysis by the Federal Reserve Board suggests that cuts in worker hours in response to the new overtime rule would add to the underemployment problem. Credit: Flickr/katerw However, economic theory suggests that employers may respond to this new rule by cutting employees’ hours or even their base pay rates in order to avoid their costs from increasing. A new analysis by the Federal Reserve Board suggests that cuts in worker hours in response to the new overtime rule would add to the underemployment problem, hurting not just part-time workers but also full-time workers.”
President-Elect Donald J. Trump (R) should be president before the injunction is lifted so could retract the rule before this case is heard by the court system.