Federal Court Blocks Overtime Rule Set to Take Effect Next Week

Yesterday, a federal judge blocked President Obama's rule to amend overtime rule regulations, which was set to take effect next Thursday, Dec. 1.

U.S. District Judge Amos Mazzant agreed with the 21 states and a group of businesses, including the U.S. Chamber of Commerce, that the rule is unlawful, Reuters reported.

The rule would have doubled the salary a worker can earn and still be eligible for mandatory overtime pay, with the minimum threshold increasing every five years.

In the 20-page ruling, Mazzant said that the rule "creates essentially a de facto salary-only test."

"Businesses and state and local governments across the country can breathe a sigh of relief now that this rule has been halted," Nevada Attorney General and leader of the 21-state coalition Adam Laxalt told NBC News. "Today's preliminary injunction reinforces the importance of the rule of law and constitutional government."

The Department of Labor, on the other hand, saw the rule as a necessary to protect workers after decades of inflation weakened the Fair Labor Standards Act over time.

"We strongly disagree with the decision by the court, which has the effect of delaying a fair day's pay for a long day's work for millions of hardworking Americans," the Department of Labor said in a statement to NBC News.

The injunction is temporary and designed to allow Mazzant more time to issue a ruling on the merits. But, according to The New York Times, the judge's language suggests he will rule against the regulation.

Despite promises from President-elect Donald Trump to overturn many of Obama's regulations, the overtime rule was expected to withstand the transition. Now, it's looking less certain. Via The New York Times:

[Because] undoing the regulation could have required a months- or years-long rule-making process similar to the one that produced it, the new overtime limit appeared likely to survive in some form. Some business lobbyists had anticipated a legislative compromise that phased in the new limit over a longer period of time and eliminated an automatic increase in the limit every three years.

The injunction would appear to make such a reprieve far less likely, although the question remains whether the Trump administration will seek a legislative deal that would raise the salary limit above the $23,660 that has prevailed since 2004, but below the Obama administration’s preferred level.

“The department’s overtime rule is the result of a comprehensive, inclusive rule-making process, and we remain confident in the legality of all aspects of the rule,” the Department of Labor said in its statement. "We are currently considering all of our legal options."