Federal judge blocks new overtime law from going into effect Dec. 1

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WASHINGTON — A federal judge has issued a temporary injunction blocking President Barack Obama’s executive order requiring paid overtime for certain workers, Bloomberg reported Tuesday.

U.S. District Judge Amos L. Mazzant III in Sherman, Texas, issued a preliminary injunction blocking the new law nationwide.

The new federal law was scheduled to go into effect Dec. 1 and was expected to impact millions of workers.

Under the Fair Labor Standards Act, salaried workers who make less than $47,500/year would become eligible for overtime pay when they work more than 40 hours a week.

Under current rules, companies can avoid paying overtime to full-time salaried employees if they make as little as $23,660 by classifying them as exempt. Those workers can’t make overtime pay even if they work more than 40 hours a week.

The White House said the 40-hour workweek has eroded over the years with more workers putting in more time and not getting compensated.

Companies are anticipating higher payroll costs by paying out more in overtime or raising the salaries of employees so they reach the $47,500 threshold so they can still be exempt.

Twenty-one states and dozens of business groups sued to block the new law from taking effect.

The salary threshold is set to be updated every three years, with it expected to increase to $51,000 by Jan. 1, 2020.


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