Texas judge rules against overtime pay for workers

A federal judge in Texas issued a nationwide injunction yesterday against an Obama administration regulation that would add millions to the number of workers eligible for overtime pay.

The regulation would have come into effect on 1 December and increased the salary limit below which workers automatically qualified for overtime pay to $47,476 from $23,660.

Judge Amos L Mazzant III of the Eastern District of Texas ruled that the Obama administration had exceeded its authority by increasing the overtime salary limit so significantly. Business groups who argued that new rules would be costly and result in fewer hours for workers were quick to welcome the ruling.

The Labour Department said it ''strongly disagreed'' with the decision and was ''considering all of our legal options,'' which would likely include an appeal in the waning days of the Obama administration, according to commentators. Ross Eisenbrey of the Economic Policy Institute, whose writings on the issue had been instrumental in helping shape the administration's regulation, called the ruling ''a disappointment to millions of workers who are forced to work long hours with no extra compensation.''

While the injunction was only a temporary measure that suspended the regulation until the judge could issue a ruling on the merits, many said the judge's language indicated he was likely to strike down the regulation.

The Labour Department said, ''We strongly disagree with the decision by the court, which has the effect of delaying a fair day's pay for a long day's work for millions of hardworking Americans,'' the department said in a statement. ''The department's overtime rule is the result of a comprehensive, inclusive rule-making process, and we remain confident in the legality of all aspects of the rule.''

At the time of the finalisation of the overtime rule  in May, consumer advocates and union groups had hailed the move as a major victory for low- to middle-income workers, updating a regulation that had been in force of over a decade.