By Illinois Radio Network
SPRINGFIELD – The overtime wage rules affecting millions of salaried workers set to go into effect on December 1 have been temporarily blocked, and will likely never go into effect.
A federal judge in Texas ordered Tuesday that the Department of Labor must halt its plan to make most salaried workers earning up to $47,476 annually eligible for overtime. The previous threshold was about $23,660. The judge’s ruling said the department didn’t have the legal authority to make the changes.
The rule change was finalized by the Obama administration this summer. Now that the change has been halted until a full hearing on the subject can take place, it is possible for President-elect Donald Trump’s administration to permanently stop the change.
“Federal agencies cannot unilaterally reinterpret federal law to impose burdens on state governments and businesses, and today’s preliminary injunction reinforces the importance of the rule of law and constitutional government,” said Nevada Attorney General Adam Paul Laxalt, who led the charge to enjoin the new rule. “Left unchecked by the Court, this latest example of federal overreach would have imposed millions of dollars of unfunded liabilities on the States, a loss of private sector jobs, huge financial and regulatory burdens on small businesses, and undoubtedly caused great difficulty across the country in implementing this oppressive rule.”
Business advocates in Illinois have criticized what they called a drastic change in how they would have had to employ their salaried workers. The National Federation of Independent Business Illinois Director Kim Clarke Maisch says the change would have burdened 44 percent of all small business owners in the country.
“It would have turned on its head the current rules for overtime. A lot of small business owners have been scrambling to determine how this was going to affect them,” she said. “When government starts to dictate things like wage levels and overtime rules, it places business owners into a one-size-fits-all situation. We know that doesn’t work.”
Supporters of the rule said salaried employees are being taken advantage of, working long hours for no extra pay.
Information obtained from the Illinois Comptroller’s office indicates that nearly 9,800 salaried state employees would have been eligible for overtime, barring certain exemptions.
Illinois State University was planning to spend up to $2.2 million in new annual costs to get the pay of approximately 275 eligible employees into compliance. The University of Illinois had planned to spend up to $3 million on employee raises to get its workers’ pay into compliance.
The Department of Labor (DOL) estimated that 193,930 workers in Illinois would have been affected by the new threshold.
The DOL could appeal the judge’s ruling, which could end up in a Supreme Court with new justices appointed by President Trump.