Just over a week before it was scheduled to go into effect, a federal law that would have more than doubled the salary threshold for overtime exemption has been blocked by a Texas judge. The Valley Industry and Commerce Association, or VICA, praised the decision, saying the new law would have placed yet another burden on businesses already struggling to comply with state and regional minimum wage and sick leave requirements. It also would have reduced employment prospects for recent graduates entering the workforce, said VICA President Stuart Waldman. “The Department of Labor rule would have significantly impacted small businesses across California, increasing labor costs while limiting opportunities for employees, especially young graduates,” Waldman said in a prepared statement. “Many young graduates are enthusiastic but still need time to learn … allowing these grads to work as salaried employees at entry-level professional jobs gives employers and graduates flexibility and opportunities they may not otherwise be able to afford.” U.S. District Court Judge Amos L. Mazzant III of the Eastern Division of Texas granted an emergency injunction in favor of the 21 states and more than 50 business organizations challenging the Labor Department’s so-called “Final Rule.” The law would have deemed an additional 4 million employees nationwide eligible for overtime pay by raising the salary threshold for exemption from $455 a week to $921 a week, or $47,892 annually. It was slated to go into effect Dec. 1 after being approved by the Obama administration in May. “Due to the approaching effective date of the Final Rule, the court’s decision to render a meaningful decision on the merits is in jeopardy,” Mazzant wrote in a court filing. “A preliminary injunction preserves the status quo while the court determines the (Labor) Department’s authority to make the Final Rule as well as the Final Rule’s validity.”
