A federal judge in Texas blocked an Obama administration expansion of the overtime rule on Tuesday, just days before it was set to take effect.
The Labor Department measure, which would have gone into effect Dec. 1, would have expanded which employees were eligible for overtime pay by doubling the salary level at which hourly workers must be paid overtime pay.
Under current Fair Labor Standards Act rules, “employees who are paid less than $23,600 per year ($455 per week) are nonexempt” and qualify for paid overtime.
Under the new rule, overtime protections would apply to workers who make up to $913 a week, or $47,476 a year, and the threshold would readjust every three years to reflect changes in average wages.
As previously reported on The Root, 21 states filed a lawsuit against the U.S. Department of Labor in September to stop the law before it went into effect, arguing that the Labor Department had acted beyond its authority and the rule would put a burden on private and public sectors by straining budgets and forcing layoffs.
The Los Angeles Times reports that Texas District Judge Amos L. Mazzant III sided with business groups including the U.S. Chamber of Commerce and halted the rule. About 4 million workers would have benefited from the new rule.
Republican lawmakers and members of the business community who were behind the challenge celebrated the judge’s decision.
“The decision brings us a step closer to curbing regulations that have resulted in $80 billion in compliance costs and more than 25 million hours of paperwork,” Linda Kelly, senior vice president for the National Association of Manufacturers, told the Times. “The fights are not yet over—and our work is just beginning.”
Read more at the Los Angeles Times.