Justice Department drops defense of Obama OT rule

The Justice Department will no longer fight to preserve President Barack Obama's attempted overtime hike that a federal judge declared invalid in August.

The department will not pursue an appeal challenging Judge Amos Mazzant's decision to strike down the Obama White House's attempt to double the threshold at which companies must pay white collar workers overtime. The decision, first reported by Bloomberg, brings to an end one of the most controversial regulatory decisions from the Obama era, though Trump Labor Secretary Alexander Acosta has said he is open to reviewing existing regulations.

Mazzant, an Obama appointee to the bench, issued a preliminary injunction preventing the new rules from going into effect in November 2016. On August 31, he delivered a final decision on the matter declaring the rules invalid. Mazzant ruled that the Labor Department "exceeded its authority" by focusing on salary levels, rather than workers' duties, to justify its expanded coverage. He also said the agency improperly established automatic three-year hikes to the threshold.

"Congress was clear that the determination should involve at least a consideration of an employee’s duties," Amos said in the ruling. "The Department has exceeded its authority and gone too far with the Final Rule. Nothing in [the law] allows the Department to make salary rather than an employee’s duties determinative."

The new department rules would have forced companies to provide overtime payments to any white collar or administrative worker earning below $47,476 in salary—more than twice as high as the existing $23,660 threshold—a move that would have affected around 4.2 million American workers, according to agency estimates. The rule sparked a legal challenge from a number of industry groups, businesses, and state governments, which claimed the agency overstepped Congress's intended interpretation of administrative employees. Mazzant agreed, calling the final rule "unlawful" because it extended benefits to specific classes of workers Congress had exempted from overtime considerations, but he rejected the state government's argument that the federal standards infringed on 10th Amendment states rights.

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