The rule, initially scheduled to go into effect Dec. 1, would guarantee overtime wages for workers earning less than $47,892 or $913 weekly. This would effectively double the current threshold.
If enacted, the new overtime pay rule has been estimated to cost businesses $12 billion per year over the next decade. (Photo by Thinkstock.)
A Texas federal judge has issued an injunction against a Department of Labor rule on overtime wages that would make 4.2 million private-sector workers—many of whom work in the fitness industry—eligible for additional pay.
U.S. District Judge Amos L. Mazzant represented 21 states and 50-plus business groups when he imposed the injunction on Nov. 22, according to a report by Forbes. The rule, initially scheduled to go into effect Dec. 1, would guarantee overtime wages for workers earning less than $47,892 or $913 weekly. The current threshold under the Fair Labor Standards Act (FLSA) is $23,660 or $455 weekly.
In the injunction, Mazzant said the plaintiffs showed “a likelihood of success on the merits,” adding the plaintiffs “have established a prima facie case that the Department’s salary level under the final rule and the automatic updating mechanism are without statutory authority.”
“The Labor Department’s overtime charges are a reckless and aggressive overreach of executive power, and retailers are pleased with the judge’s decision,” said David French, the National Retail Federation’s senior vice president for government relations, according to Forbes. “The rules are just plain bad public policy, and we are pleased that the judge is allowing time for the case to go forward before they can go into effect. We hope the judge ultimately finds in our favor, and in the meantime this timeout gives Congress a chance to take another look at the impact of these rules.”
In a free Club Industry webinar in April, Kara Maciel, the labor chair of Conn Maciel Carey PLLC's Employment Practice Group, shared insights on the rule as it relates to the fitness industry. She outlined several preliminary measures club owners should take in order to prepare for Dec. 1. This included: adjusting policies regarding overtime and time-tracking systems for the increased number of employees who will receive additional pay, monitoring employees who are near the salary threshold and hold supervisor positions, and ensuring the current workforce meets exempt classification via an audit.
The Department of Labor must now seek an appeal and potentially revise the rule, should it be enacted in any form. It has been estimated to cost businesses $12 billion per year for the next decade, according to The Washington Times.