Federal Judge Halts Implementation Of New Overtime Regulations

By Christine Kern, contributing writer

FLSA overtime rule affects an estimated 200,000 hospital workers and 300,000 healthcare workers.

In a surprising turn of events, Federal District Judge Amos L. Mazzant III of the Eastern District of Texas has issued a nationwide injunction against the expansion of the new overtime regulations created by the Obama administration, according to the New York Times.

The change was scheduled to take effect on December 1 and would have raised the salary threshold for overtime to $47,476 from $23,660. It impacts approximately 4.2 million workers nationwide, USA Today reported. Among those are an estimated 200,000 hospital workers and 300,000 non-hospital healthcare workers according to the U.S. Department of Labor.

The suit was raised by 21 states and dozens of business groups that argued the new rule would increase government costs in their respective states $115 million in 2017 alone and could decimate many smaller employers, Bloomberg reported.

In a statement, The Labor Department said they “strongly disagree with the decision by the court,” suggesting they might file an appeal. The injunction marks just a temporary measure, suspending the regulation until the judge can study the case and issue a ruling on its merits, and experts suspect it is likely that he will ultimately strike down the regulation.

In his ruling, Judge Mazzant suggested the administration lacked the authority to establish a salary limit which the Labor Department has raised repeatedly since Congress enacted the underlying legislation in 1938. Judge Mazzant did state in a footnote he was not commenting generally on the legality of establishing a salary limit, just the particular increase the plaintiffs had challenged. “The court’s decision suggests that the Department of Labor has no authority whatsoever to regulate a salary minimum,” said Allan S. Bloom, of the law firm Proskauer Rose.

President-elect Trump has yet to say what his plans are for the overtime rule, though he was previously in support of exceptions for small businesses. The DOL can appeal the ruling, but a Trump administration subsequently could drop any appeal.

Healthcare workers most directly affected by this decision are medical and pharmacy technicians; medical and physical therapist assistants; nurses; and paramedics. The FLSA rule also temporarily exempted Medicaid-funded home healthcare providers and healthcare facilities with no more than 15 beds that treat individuals with disabilities, assigning a March 17, 2019 implementation date.