A federal judge in Texas issued a nationwide injunction on Tuesday against an Obama administration regulation expanding by millions the number of workers who would be eligible for overtime pay. The rule change was set to go into effect Dec. 1.
The injunction is good news for small-business owners feeling overwhelmed by the rule change and its implications on their bottom line — and for those who had delayed taking action to realign their workforces, said Nancy Hammer, senior public policy counsel for the Society for Human Resource Management.
“What this injunction means is that the Dec. 1 deadline is no more,” she said. “Everyone can take a breather.”
The regulation would have raised the salary limit below which workers automatically qualified for overtime pay to $47,476 from $23,660. The judge, Amos L. Mazzant III of the Eastern District of Texas, ruled the Obama administration had “exceeded its authority by raising the overtime salary limit so significantly,” according to The New York Times.
While the injunction is temporary, and the Labor Department can appeal the decision, Hammer said any further changes “will take a while”— far beyond the Dec. 1 deadline — and with an incoming administration that has expressed opposition to the rule, “it’s unclear whether this will go forward in any form.”
Hammer’s advice to small-business owners?
“Be aware of this issue and watch it,” she said. “From our perspective, we’ve been telling employers, if you made plans but haven’t yet implemented them, it doesn’t hurt to hold onto the plans, just in case.”
For business owners who have already made adjustments, they’ll need to decide on a case-by-case basis what makes the most sense for their businesses and employees, she said. But, she added, anecdotally, at least, it doesn’t appear many business owners will find themselves in that position.
“I think there are a significant number of small businesses who had started to make plans but had not yet implemented them yet,” she said, emphasizing that, for now, there’s no reason to make any changes.
