President Barack Obama got some bad news on Tuesday when a federal judge in Texas blocked his Labor Department’s contentious overtime rule, putting one of his top initiatives in jeopardy.
The Hill reported that Texas U.S. District Judge Amos Mazzant released a 20-page order in which he issued a temporary injunction halting the rule nationwide.
“Due to the approaching effective date of the Final Rule, the Court’s ability to render a meaningful decision on the merits is in jeopardy,” he wrote. “A preliminary injunction preserves the status quo while the Court determines the department’s authority to make the Final Rule as well as the Final Rule’s validity.”
The rule was set to give overtime pay to over four million workers beginning on December 1, and it would have forced employers to pay overtime to most of their salaried workers who earn less than $47,476 a year, which is much higher than the current annual salary limit of $23,660.
Obama’s rule was challenged in federal court by 21 state attorney generals and dozens of business owners. Experts say the litigation and appeals process will likely go on until after Donald Trump’s inauguration, meaning the president-elect will be able to scrap the rule by dropping the White House’s defense of it. During his campaign, Trump said Obama’s overtime regulations are hurting the economy, and that he would like to roll them back.
“Rolling back the overtime regulation is just one example of the many regulations that need to be addressed to do that,” Trump told Circa in August. “We would love to see a delay or a carve-out of sorts for our small business owners.”
Various business groups have praised Mazzant for his move.
“Today’s decision is an important win for all manufacturers in America — halting what would have been a dramatic and devastating change in labor law that manufacturers could not afford,” said Linda Kelly, general counsel for the National Association of Manufacturers. She then called on Trump to “right a regulatory and legal system that has pummeled the manufacturing industry in America.”
“This is a victory for small business owners and should give them some breathing room until the case can be properly adjudicated,” NFIB President and CEO Juanita Duggan said in a statement.
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