Gov. Dannel P. Malloy and the head of Connecticut’s largest labor coalition were quick to criticize a Texas judge’s ruling blocking President Barack Obama’s national bid to expand overtime pay protections to more than 4 million Americans.
“It is deeply disappointing that any action would be taken to delay expanding overtime protections that would strengthen and grow the working class while also boosting our economy,” Malloy said.
The new rule was scheduled to take effect on Dec. 1 and would have doubled the salary level at which salaried workers must be paid extra for overtime pay, from $23,660 to $47,476. Siding with business groups including the U.S. Chamber of Commerce, Texas District Judge Amos L. Mazzant III halted it Tuesday.
The Fair Labor Standards Act says that employees can be exempt from overtime if they perform executive, administrative or professional duties, but the rule “creates essentially a de facto salary-only test,” Mazzant wrote in his 20-page ruling.
Joining Malloy in criticizing the judge’s ruling was Lori Pelletier, president of the Connecticut AFL-CIO.
“This federal court ruling has exponential costs to working families who for over 20 years were excluded from overtime protections,” Pelletier said. “And with any hope of a Supreme Court sympathetic to understanding basic worker protections growing dimmer by the day, this ruling may set us back indefinitely.”
The Labor Department can appeal the ruling or drop the appeal after Republican President-elect Donald Trump takes office in January.
Trump said on the campaign trail that the overtime rule is an example of the type of overly burdensome business regulation that he would eliminate.
The rule, finalized in May, represented the first such change in more than a decade and was hailed at the time as the most consequential action the Obama administration could take for middle-class workers without congressional involvement.
When Obama signed the Act in May, he said: “If you work more than 40 hours a week, you should get paid for it or get extra time off, to spend with your family and loved ones. It’s one of the most important steps we’re taking to help grow middle-class wages and put $12 billion more in the pockets of hardworking Americans over the next 10 years.”
Twenty-one states and a coalition of business groups argued the Labor Department acted beyond its authority under the Fair Labor Standards Act.
Republican lawmakers and their allies in the business community, which were behind the legal challenge, celebrated the decision.
“We are very pleased that the court agreed with our arguments that the Obama administration’s new overtime rule was unlawful and stopped rule from taking effect on December 1,” U.S. Chamber of Commerce Senior Vice President of Labor, Immigration, and Employee Benefits Randy Johnson, said. “If the overtime rule had taken effect, it would have resulted in significant new costs – more than $1 billion according to the Congressional Budget Office – and it would have caused many disruptions in how work gets done.”
But Malloy didn’t see it the same way.
“The steps taken by President Obama, Vice President Biden, and Secretary (Thomas) Perez to modernize overtime protections for the nation’s workers would extend overtime protections to 4.2 million more Americans and are expected to boost wages for workers by $12 billion over the next 10 years,” Malloy said. “There should be bipartisan support for these protections. Too often, the same voices claiming support for the working class are more than willing to use their power to block meaningful policy changes that help those very workers.”
Under the overtime protection rule, which applies to businesses of all sizes, the salary threshold updated every three years and is projected to rise to $51,000 on Jan. 1, 2020.
In Connecticut, employers that typically have lower-wage workers – in the fast food, hospitality, home health care and nonprofit industries – likely will be the most impacted, according to Mark Soycher, counsel for human resources services at the Connecticut Business & Industry Association.
Many Connecticut businesses that were to be impacted by the change also are impacted by the state’s rising minimum wage, Soycher noted. The state minimum wage is slated to rise to $10.10 on Jan. 1, 2017.