WASHINGTON, D.C. - A federal judge issued a preliminary injunction halting the U.S. Department of Labor's Overtime Rule from taking effect nationwide on December 1.
The labor rule would dramatically increase the number of employees eligible for overtime, and generated pushback among businesses.
“Since the DOL’s immediate phase-in date was announced, we’ve heard from business owners and their employees who are worried about implementing this increase overnight," said U.S. Representative. Kurt Schrader, Dem.-Oregon. "Without sufficient time to plan for the increase, cuts and demotions will become inevitable, and workers will actually end up making less than they made before." Schrader introduced a bill in May to phase in the implementation, but it stalled during the general election.
As part of the final rule, the salary level under which employees qualify for overtime pay would have increased from $455 per week ($23,360 annually) to an estimated $913 per week ($47,476 annually). In addition, the rule would have provided for automatic updates to the threshold every three years without seeking public comment.
"Due to the approaching effective date of the Final Rule, the Court's ability to render a meaningful decision on the merits is in jeopardy," wrote Judge Amos Mazzant of the U.S. District Court for the Eastern District of Texas. "A preliminary injunction preserves the status quo while the Court determines the department's authority to make the Final Rule as well as the Final Rule's validity."
The National Lumber and Building Materials Dealers Association praised the action taken by Judge Amos Mazzant of the U.S. District Court for the Eastern District of Texas.
"NLBMDA welcomes the preliminary injunction to DOL's Overtime Rule," said Jonathan Paine, NLBMDA President and CEO. "The rule in its current form would have had many unintended consequences reducing flexibility and advancement opportunities for employees."
The temporary injunction means that the rule will not go into effect until the case is resolved or the injunction is lifted by the judge. As a result, the ruling delays the December 1 implementation from taking place as planned next week.
The Department of Labor is likely to appeal the injunction, though no timeline has been set for the case to move forward.
The emergency motion for a preliminary injunction was filed on October 12 by 21 states on the grounds that the DOL exceeded its authority by raising the salary threshold too much and providing automatic updates to the threshold without stakeholder input. The states' cases against DOL has been consolidated with another lawsuit brought by 50 business groups, including the U.S. Chamber of Commerce and National Association of Manufacturers, which raised similar objections to the rule.
Earlier this year, NLBMDA met with the White House's Office of Management Budget Office of Information of Regulatory Affairs, stating that proposed changes in the number of employees eligible for overtime pay failed to consider regional differences.
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