So, Don’t Sweat That New Overtime Rule Just Yet

overtime law blocked

A federal judge on Tuesday issued an injunction blocking the U.S. Department of Labor’s Overtime Rule set to go into effect December 1. The “Final Rule” would have increased the minimum salary for exempt employees from $23,660 to $47,892 per year.

U.S. District Judge Amos Mazzanti agreed with 21 states and a coalition of business groups filing an emergency motion (PDF) challenging the Final Rule. After considering the arguments in a preliminary hearing, the judge granted the plaintiffs’ motion. The move temporarily blocked the rule from taking effect and allows more time for litigation.

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Overtime Law Blocked as Business Groups Rejoice

Business trade associations and advocacy organizations are applauding the judgment that has blocked the overtime law.

“Today’s decision is an important win for all manufacturers in America — halting what would have been a dramatic and devastating change in labor law that manufacturers could not afford,” said the National Association of Manufacturers in a prepared statement.

In a similar statement, National Federation of Independent Business president and CEO Juanita Duggan remarked, “This is a victory for small business owners and should give them some breathing room until the case can be properly adjudicated.”

The Final Rule’s fate under President-elect Donald Trump’s administration is likely dire. It’s well known Trump plans to prune what he considers burdensome government regulation — and that includes nixing the overtime rule.

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“Rolling back the overtime regulation is just one example of the many regulations that need to be addressed to do that,” Trump told Circa, a news site, in August. “We would love to see a delay or a carve-out of sorts for our small business owners.”

According to the Labor department, more than four million American workers are currently classified as exempt from overtime pay yet earn salaries that fall below the new minimum threshold.

Prior to the judge’s ruling, employers had until December 1 to either give exempt employees who make below the new threshold a raise or reclassify them as nonexempt.

Image: Wikipedia

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Paul Chaney Paul Chaney is a Staff Writer for Small Business Trends. He covers industry news, including interviews with executives and industry leaders about the products, services and trends affecting small businesses, drawing on his 20 years of marketing knowledge. Formerly, he was editor of Web Marketing Today and a contributing editor for Practical Ecommerce.

One Reaction
  1. It is important to think about business owners as well. It is not just about the employees for businesses also fuel the economy. It is important to strike a balance between them.