ATLANTA -- A federal court is blocking the start of a new rule that would make millions of American workers eligible for overtime pay beginning Dec. 1.
The overtime rule affects an estimated 4.2 million people. If approved, they would earn time-and-a-half for each hour they work beyond 40 hours a week.
The rule would force businesses to pay overtime wages to those making less than $47,476 a year.
The court says the Department of Labor's rule exceeds the authority the agency was delegated by Congress.
The department of labor cannot implement the change until it’s further examined.
Twenty-one states have sued to block the changes before it goes into effect. The rule is on hold until they figure out how to address the challenges.
The ruling is a major blow to the Obama administration, which wanted to shrink the so-called "white-collar exemption" that allows employers to skip overtime pay for salaried administrative or professional workers who make more than about $23,660 per year.
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