WASHINGTON—A Texas federal judge has struck down the Labor Department's overtime rule, saying that the department improperly looked at workers' salaries instead of job descriptions to determine overtime pay eligibility.
"This is a welcomed decision for many small businesses – including credit unions – that would not have been able to meet this rule's immense overtime requirements without it impacting the services they provide," said NAFCU Executive Vice President of Government Affairs and General Counsel Carrie Hunt. "NAFCU and our members believe this rule would have created major unintended consequences and obstructed growth opportunities for many in the workforce."
The judge, Amos Mazzant of the Eastern District of Texas in Sherman, Texas, originally placed a temporary delay on the rule last year, which kept it from going into effect on Dec. 1, 2016, noted NAFCU.
The overtime rule raises from $23,660 to $47,476 the salary threshold at which employees are eligible for overtime pay under the Fair Labor Standards Act. NAFCU has raised concerns that the rule fails to adequately consider geographic salary differences or provide exemptions for non-salary-based employee advancement opportunities.
NAFCU signed on last year with 59 other organizations to an amicus brief supporting groups that claim the rule will increase costs for businesses and may force the demotion or layoff of workers.