A block on President Obama’s rule to extend overtime pay to four million workers nationwide could be “welcome news” for state employers looking to keep expenses low, but others argue the block would harm Wisconsin families.
Wisconsin was part of a 21-state lawsuit against the overtime pay ruling. National organizations like the National Association of Manufacturers and the U.S. Chamber of Commerce also filed their own lawsuit. Chris Reader, Wisconsin Manufacturers and Commerce director of health and human resources policy, said it would have been expensive for employers to comply with the ruling had it passed.
“[WMC] applaud the court for halting the rule to allow the pending court cases to work through the system prior to employers having to adopt policies to comply with the rule changes,” Reader said.
On Obama’s instruction, the U.S. Department of Labor made modifications to the Fair Labor Standards Act earlier this year, requiring state and local government employees earning less than $47,476 annually to be paid overtime for working any hours over 40 hours a week. Before this, employees who earned less than $23,660 were paid overtime. But on Nov. 22, a federal judge ruled that the DOL was not authorized to make these changes and temporarily blocked them.
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Reader said the block will allow parties in both lawsuits against the ruling to work through the appeals process. This will stop employers from implementing sudden changes that could have shifted many workers from salaried to hourly positions.
Wisconsin Attorney General Brad Schimel said in a statement that he was “incredibly happy” the rule was halted because it would have doubled the salary-level threshold for all employees to make them exempt from overtime pay. The rule, which would have come into effect on Dec. 1, also contained a ratcheting mechanism to automatically increase salary-level threshold every three years without going through federal processes. This would have allowed more people to be eligible for overtime pay in the long-run.
“Wisconsin must have the ability to set its own priorities and policies,” Schimel said.
But proponents of the rule said it would have helped support almost 80,000 workers in Wisconsin. Wisconsin AFL-CIO President Phil Neuenfeldt said in a statement that overtime protections are “long overdue” and would have brought a “much-deserved boost” to Wisconsin’s workers.
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Wisconsin AFL-CIO Secretary-Treasurer Stephanie Bloomingdale said the block reflected Schimel and Gov. Scott Walker’s partiality toward corporate campaign funders.
“By suing to stop the new overtime regulations from protecting workers, AG Schimel is putting himself squarely on the side of corporate CEOs who want to continue to deny the overtime pay working men and women deserve,” Bloomingdale said.
The block also affected more than 3,000 University of Wisconsin employees who were going to become eligible for overtime pay after the ruling.
Reader is hopeful President-elect Donald Trump will reverse the rule and work toward a more permanent block on it with the Congress. As of now, the rule’s proponents are working on appealing the block.