Justice Department drops appeal to save Obama overtime rule

The Justice Department announced on Tuesday that it will not defend an Obama-era Labor Department rule that would have extended overtime benefits to more than 4 million workers after a federal judge struck it down last week.

Bloomberg BNA reported on Tuesday that the administration will drop its appeal, filed in December, signaling it agrees with the court decision.

 

Last week, a federal judge appointed by former President Barack Obama struck down the rule, saying it improperly focused on workers’ salaries instead of their job description. The rule would have forced employers to pay overtime to most salaried workers earning less than $47,476 annually. The salary cutoff for overtime pay now stands at $23,660.

The judge, Amos Mazzant, initially put the rule on hold last November. It was set to go into place on Dec. 1.

{mosads}The ruling was celebrated by conservative and industry groups such as the Restaurant Law Center, which represents the restaurant industry.

“The Department of Labor under the previous administration overstepped its authority in making changes to the federal overtime rule. Today’s decision to invalidate the rule demonstrates the negative impacts these regulations would have had on businesses and their workers. We will continue to work with [the Department of Labor] on behalf of the restaurant industry to ensure workable changes to the overtime rule are enacted,” the Restaurant Law Center said last week in a statement.

In December, the Labor Department under Obama wrote that it “strongly disagreed” with the judge’s initial hold on the rule.

“We strongly disagree with the decision by the court, which has the effect of delaying a fair day’s pay for a long day’s work for millions of hardworking Americans,” the agency said.

“The department’s overtime rule is the result of a comprehensive, inclusive rulemaking process, and we remain confident in the legality of all aspects of the rule.”

Progressive groups reacted swiftly to the Trump administration’s decision. In an email, the president of American Bridge accused Trump of trying to “further rig the economy for the rich.”

“Donald Trump personally screwed over hundreds of employees by refusing to pay their overtime and now he’s using the Justice Department to slash the paychecks of 4 million hard-working Americans who will not receive the overtime pay ​that ​they earn. This is Trump’s latest action that is at odds with his campaign trail rhetoric, and ​it ​further shows how his economic agenda is solely designed to further rig the American economy for the rich – including Trump himself – at the expense of American workers,” group president Jessica Mackler wrote.

“The American Dream is moving farther and farther out of reach of our country’s workers and Donald Trump is to blame.”