Former-President Obama’s dream of extending overtime rights to around 4.2 million employees appears dead in the water, according to The Hill. On Thursday, August 31, 2017, a Texas federal judge struck down the Obama-era proposal to radically alter American labor laws, ruling in favor of business organizations and state governments who argued that the expansion represented a drastic deviation from the spirit of the Fair Labor Standards Act.
Now, the Labor Department of Obama’s successor, President Trump, has said it will not appeal Judge Amos Mazzant’s decision, effectively sounding the plan’s death knell. Six days earlier, Judge Mazzant denied a request from the Texas AFL-CIO to intervene and defend Obama’s rule itself.
Overtime Expansion Will Not Be Defended
Obama’s idea was ambitious, immediately garnering pushback from business leaders, powerful corporate lobbyists and conservative politicians alike. The proposal was to double the federal salary threshold, granting an automatic right to overtime to any salaried worker making less than $47,476 per year. That drastic increase, Judge Mazzant wrote in his August 31 ruling, was simply too much:
“The department has exceeded its authority and gone too far with the final rule,” the Judge wrote, “creat[ing] a final rule that makes overtime status depend predominately on a minimum salary level, thereby supplanting an analysis of an employee’s job duties.”
Most low-wage workers are entitled to overtime pay as a matter-of-course, regardless of job duties or responsibilities. But the situation for “white collar” workers is a little more complicated. When an employee makes a salary, the analysis turns to a two-factor test: how much is the employee’s salary and what do they do on the job? The Fair Labor Standards Act, America’s main federal labor law, sets the salary threshold at $23,660.
Workers who make a salary lower than $23,660 are automatically entitled to overtime; workers who make more aren’t necessarily out of the game, but the analysis now turns to the question of job duties.
Judge Mazzant: Job Duties First, Salary Later
As Judge Mazzant wrote in his opinion, Congress included a roster of “exempt” job duties in the Fair Labor Standards Act for a reason. In fact, the Judge argues that Congress was primarily concerned with employees who perform “executive,” “administrative” or “professional” tasks – not how much those employees actually make. The salary threshold, Judge Mazzant says, was simply a means of screening out workers who obviously should be entitled to overtime. The real question of overtime eligibility, the Judge concludes, hinges on job duties, not salary.
The Labor Department’s proposal to raise the salary threshold, on the other hand, took all the nuance out of this analysis, Judge Mazzant held, turning a “duties-first” test into a “salary-first” test.
Lesser Changes May Be On The Way
Now that President Trump’s labor regulators have signaled their intention to drop the issue entirely, things will go back to normal – at least for the time being. The nation’s current Secretary of Labor, Alexander Acosta, has said that, while he thought doubling the salary threshold was a step too far, the numbers should be increased somewhat to account for inflation and wage growth. Going forward, President Trump’s administration will be able to rewrite the labor rules, unhampered by any suggestions from his predecessor.