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A federal court in East Texas has blocked a Labor Department rule, aimed at increasing the number of employees eligible for overtime. The rule had been set to go into effect December 1. It's now unlikely to take effect before President Obama leaves office.
Currently, workers are only eligible for overtime pay if they make less than $455 per week. The new rule would have more than doubled that cap, to $913 per week. That would have benefited 370,000 workers in the Lone Star State.
Texas Attorney General Ken Paxton released a statement, saying the rule would force businesses to cut their employees' hours in order to hold down costs. Paxton is co-leading a 21-state coalition that asked for the injunction.
Here’s @KenPaxtonTX‘s statement on Sherman judge blocking Labor Department overtime rule: pic.twitter.com/9oOlZ5Ji75
— Patrick Svitek (@PatrickSvitek) November 22, 2016
Jeff Barnes, a Houston attorney with the law firm Fisher Phillips, says many companies have already gone forward with plans to comply with the rule.
"The interesting question is, what do companies do when they have already started to pay employees overtime who previously weren't receiving overtime or employees whose salary was increased to meet the new salary basis threshold that was supposed to take effect on December 1?" Barnes says.
The Labor Department estimates the rule would have meant a bump in pay for 4.2 million workers nationwide heading into the holiday season.
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