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Obama’s New Overtime Labor Rule Faces Last Hurdle

A Texas Federal Judge is expected to release a ruling on Obama’s new overtime rule Tuesday.

Judge Amos L. Mazzant III of the U.S. District Court for the Eastern District of Texas will decide on whether or not to issue an injunction, which would delay the Dec. 1 implementation of the overtime exemption salary threshold.

The new rule, championed by President Barack Obama’s Department of Labor, raises the salary threshold for workers to qualify as exempt from overtime pay requirements from $455 to $913 per week (or from $23,660 to $47,476 per year), and increases the current minimum salary requirements for employees exempt from overtime pay under the “highly-compensated” exemption from $100,000 to $134,004 per year.

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As the rule currently stands, there will be an automatic increase to thresholds every three years, beginning in 2020.

In September, two lawsuits were filed in the Eastern District of Texas challenging the Labor Department’s authority to increase the salary threshold more than two-fold. One of the lawsuits was filed by 21 states, while the other was filed by business groups, including the U.S. Chamber of Commerce.

The lawsuits were filed in the Eastern District of Texas because of the court’s reputation for being plaintiff-friendly and for its speedy decisions. The two suits were consolidated in October, at which point the plaintiffs asked the court to consider a motion to issue a preliminary injunction which would block the new regulation from going into effect Dec. 1. The court agreed to hear the motion, whichMazzant heard last week.

It is unclear whether the judge will issue an injunction, but most commentators believe the judge will not halt the rule from taking effect, according to JD Supra Business Advisor.

The new rule will impact around five million workers who will become eligible for overtime pay starting Dec. 1.

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