A federal judge on Tuesday blocked an Obama administration rule to extend mandatory overtime pay to more than 4 million workers from taking effect, imperiling one of the outgoing president's signature achievements for boosting wages.
U.S. District Judge Amos Mazzant in Sherman, Texas, agreed with 21 states and a coalition of business groups, including the U.S. Chamber of Commerce, that the rule is unlawful and granted their motion for a nationwide injunction. It was to take effect Dec. 1.
The rule would have doubled to $47,500 the maximum salary a worker can earn and still be eligible for mandatory overtime pay.
The states and business groups claimed in lawsuits filed in September that were later consolidated that the drastic increase in the salary threshold was arbitrary.
Mazzant, who was appointed by President Obama, held that the rule runs counter to the federal law that governs who is eligible for overtime. The law does not allow the Labor Department to determine eligibility based only on salary levels, Mazzant said.