Labor
Injunction Halting Federal Overtime Rule Draws Praise, Criticism
Rule was set to go into effect on Dec. 1
Construction industry groups are cheering a decision by a federal district court to block a new U.S. Dept. of Labor overtime rule, which was set to go into effect on Dec. 1. But labor unions and the department itself say the court's preliminary injunction short-changes workers.
On its website, DOL says it “strongly disagrees” with the Nov. 22 decision by the U.S. District Court for the Eastern District of Texas and is considering all legal options.
“The Department’s overtime final 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 DOL says.
The final regulation, issued in May, would have required employers to pay overtime to any worker who earns less than $47,500 a year—more than twice the current $23,500 threshold. The regulation would be updated every three years to keep up with inflation.
The Obama administration estimates that the change would extend overtime benefits to 4.2 million more workers and boost their total wages by $12 billion over 10 years.
But construction employer groups contend that the rule would have unintended consequences.
Kristen Swearingen, Associated Builders and Contractors’ vice president of legislative and political affairs, said the rule would have forced some employers to consider switching some workers from salaried to hourly positions.
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She also said construction projects would be particularly affected by the requirement that the rule be updated every three years. Construction projects “often last longer than three years and are carefully planned to stay on time and under budget,” Swearingen said in a statement.
The state of Nevada filed the challenge earlier this year.
The overtime rule is the latest DOL regulation to be blocked by a federal court in Texas. In the past month, such courts also have issued injunctions or preliminary injunctions against the Labor Dept.’s “blacklisting” regulation, which requires contractors to verify compliance with workplace-related statutes, and its “persuader” rule, which broadens companies' requirments for publicly disclosing consultants they hire during unions' organizing campaigns.
