News and analysis
December 01, 2016

Obama Administration Appeals Injunction Blocking Overtime Rule

The Department of Labor is fighting a federal judge’s decision to block the expansion of overtime-pay benefits to more than 4 million U.S. workers.

The agency filed an appeal Thursday to defend a federal policy that would make full-time, salaried employees eligible for time-and-a-half pay if they earn up to $47,476 a year, about twice the current ceiling.

The policy was set to take effect Thursday but implementation was temporarily halted by a federal judge in Texas, who granted an injunction November 23 to states and business groups challenging the overtime change in court. The judge said federal law does not grant the Obama administration the authority to set overtime eligibility based on salary level alone.

Announced in May, the proposed expansion sparked widespread concern among nonprofit leaders, many of whom feared that higher labor costs would force charities to limit staff hours, cut services, convert some salaried jobs to hourly, and even eliminate some positions. Others cheered the measure, hoping it would provide fairer compensation.

The judge’s decision to halt the policy a mere week before it was set to take affect has further distressed nonprofit leaders who had already made tough decisions about how to comply.

One of those is Sylvia Fuerstenberg, executive director at Auburn Youth Resources. The Seattle-area nonprofit raised some people’s salaries and turned others into hourly employees in anticipation of the Dec. 1 implementation.

"It’s mind-blowing to me that at the 11th hour there was an injunction," Ms. Fuerstenberg says. "If they had made this ruling six months ago, maybe we would have waited."

Send an email to Rebecca Koenig.