Federal district court granted an injunction against controversial Department of Labor overtime rule

Randi Thompson, Nevada state director of the National Federation of Independent Business (NFIB) had one word Nov. 22 when she heard that the federal district court decided to grant an injunction against the controversial Department of Labor overtime rule.

“Yahoo!!” Thompson wrote in an email to the NNBW.

The regulation, which would have taken effect on Dec. 1, more than doubles the minimum salary threshold for employees that are exempt from collecting overtime, from $23,660 per year, to $47,476.

“This is a victory for small business owners and should give them some breathing room until the case can be properly adjudicated,” NFIB president and CEO Juanita Duggan, said in a press release.

In October, a coalition of 21 state attorneys general, lead by the AGs from Nevada, Adam Laxalt, and Texas, Ken Paxton, filed a petition for an injunction in the overtime rule in the U.S, District Court for the Eastern District of Texas to block implementation of the rule. The NFIB and a number of business groups filed a separate suit in September in the same jurisdiction. The court, which combined the cases, granted the states’ petition for an injunction.

“It is important to note that Judge (Amos L.) Mazzant’s ruling has not invalidated the Final Rule; it has simply placed its implementation and enforcement ‘on hold’ at this time,” Dora Lane, partner with Holland & Hart specializing in labor and employment law, said in an email to the NNBW.

“ ... no adjustments to comply with the Final Rule are currently necessary,” she said. “Business owners should, however, diligently follow the case developments because it is difficult to tell how much time might be allowed to commence compliance, in the event that the Final Rule is ultimately determined to have been properly promulgated.”

The court’s next decision will focus on NFIB’s motion for a summary judgement to decide the legality of the overtime rule.

NFIB has been fighting on several fronts since the overtime rule was announced by the DOL in March. According to Duggan, it would increase labor costs for small businesses by forcing them to pay overtime to millions of additional workers.

Approximately 44 percent of small businesses employ at least one person who would be eligible under the rule, according to research by NFIB.

Since March, with only six months to prepare, businesses owners have been in a rush to prepare and have already begun the transition.

“It’s a lot more than just tracking hours. Small business does not have the personnel to cope with the regulations,” Thompson said in a previous interview with the NNBW.