Barack Obama's overtime pay rule faces uncertain future under Donald Trump administration


President Barack Obama's landmark legislation on overtime pay was set to go into effect Dec. 1, which would increase the number of people who qualify for time-and-a-half hourly wages.

Yet 21 states and a coalition of more than 50 businesses are suing the federal government in a conjoined lawsuit that attempts to block the overtime rule. And U.S. federal judge Amos Mazzant of Texas decided Tuesday to issue a preliminary injunction on the new law ahead of its Dec. 1 start date. Mazzant accepted the plaintiffs' argument that not doing so "could cause irreparable harm." The overtime law will subsequently be on hold while the courts examine its legality — a process that will extend into President-elect Donald Trump's tenure.

Businesses anticipated a volatile role out of the new rule: They simultaneously tried to adjust to the new regulation while also expecting it would likely change under a Trump administration.

The Department of Labor's rule more than doubles the threshold income for those who qualify for overtime pay: It used to be that you couldn't qualify unless you earned less than $23,660; now that maximum is $47,476. 

As long as your annual income is less than the threshold, your hourly wage gets bumped up to time-and-a-half whenever you work more than 40 hours per week. 

Within the first year of its implementation, the Department of Labor anticipates the law would benefit more than 4 million workers total. 

While Trump has not explicitly commented on the overtime standards, he has been a critic of regulation, announcing he intends to scrap two pieces of existing regulation for every new one introduced under his government.

Julio Cortez/AP

Furthermore, Republicans on Capitol Hill have actively tried to stop the overtime pay changes, suggesting a Republican-majority Congress could potentially repeal the new law. 

Several companies have started trying to reduce the costs of this new regulation by slightly increasing employees' salaries to above $47,476 — something Wal-Mart has done, for example, to avoid paying overtime — or by switching some employees to hourly instead of full-time employment. 

Carl Howard, CEO of Italian restaurant chain Fazoli, told the Wall Street Journal his company would take "a wait-and-see approach" to the perhaps-tenuous regulation.

Nov. 22, 2016, 8:22 p.m.: This story has been updated.