Court Strikes Down Overtime Rule

On December 1, the Labor Department's new overtime rules were supposed to kick in. The new rules moved the salary limit on paying overtime from $23,660 to $47,476, allowing around 4 million more workers to actually get paid for the overtime they work. The last time the salary limit had been raised by the Labor Department was in the mid-1970s and inflation has eaten away at that limit substantially over time. In 1975, 60% of workers were eligible for overtime pay. Today that number is 7%. Even more importantly, the new rule requires that the limit be adjusted for inflation every three years going forward. The salary limit is just one of three elements to determining whether an employee will not be eligible for overtime. The other two are whether they are salaried, as opposed to hourly, employees and the actual duties, such as supervisory, that they perform.

Yesterday, a judge in Texas put a nationwide stay on the implementation of those rules. This is the fourth time in less than two years that a Texas judge has put a nationwide injunction on a change implemented by the Obama administration. In his ruling the judge declared, "The salary level was purposefully set low to 'screen out the obviously nonexempt employees making an analysis of duties in such cases unnecessary.'…But this significant increase to the salary level creates essentially a de facto salary-only test." In other words, the salary limit must be kept low in order to prioritize the analysis of the actual duties the worker performs. This is what allows fast-food places to force "managers" to work 60 or 70 hours a week, with the majority of that time just cooking fries or flipping burgers, and still not get paid overtime. The judge, however, ruled that "high" salary limit in the new rules essentially negates the other two elements of determining who receives overtime. In fact, his opinion suggested that any salary limit may not be legal although he seemingly backed away from that later in his ruling by stating that that opinion only applied in this case, similar to the Bush v. Gore ruling. Perhaps we can call this type of ruling an invocation of the "Democratic precedent", in that it only applies in just the one specific instance to the detriment of Democrats.

The Labor Department, however, had done extensive research in order to come up with the new $47,476 level. The Bureau of Labor Statistics (BLS) regularly publishes data on supervisory workers and the Labor Department used that data in order to come up with its new limit, a level that is actually below the median BLS level for supervisory workers. Needless to say, that did not sway the judge.

This ruling, in effect, kills the implementation of the overtime rule, unless, of course, the Trump Administration wants to appeal this judge's ruling further in the courts. Perhaps moving the jurisdiction out of Texas might help just a little. If Trump is intent on helping the working class, here is a way to help four million of those workers. Democrats in Congress should hold his feet to the fire on this one, putting pressure on Trump to keep his campaign promise to American workers. And if, as expected, he does nothing, Democrats need to make sure the public knows exactly where he stood the very first time he had a chance to increase the wages of working Americans. Democrats will have lots of fights in the years ahead in order to defend the progress since the New Deal. Here is a fight where Democrats can actually play a little offense. They need to do so.