A federal judge in Texas ruled against last week the Department of Labor’s overtime regulation, which would have extended overtime benefits to more workers.
Texas District Court Judge Amos Mazzant ruled that the Department of Labor overstepped its bounds in setting a higher salary threshold for overtime.
The National Federation of Independent Business (NFIB) commended the judge’s ruling. It would increase labor costs for small businesses by forcing them to pay overtime to millions of additional workers, Karen Harned, executive director of the NFIB Small Business Legal Center, said.
“This is a victory for small businesses,” Harned said. “We’re pleased the court made permanent the temporary injunction it imposed against the rule in November. If the overtime rule had been allowed to stand, it would have driven up the cost of doing business for employers across the country.”
The regulation would have required employers to pay overtime to workers who earn less than $47,476 per year. This is more than twice the current annual salary limit of $23,660. It would have extended overtime to an estimated 4 million more people.
According to NFIB research, 44 percent of small businesses employ at least one person who would be eligible under the rule.
NFIB and the 55 other business groups filed suit in the U.S. District Court for the Eastern District of Texas last September to block implementation of the rule. A coalition of 21 state attorneys general filed a separate action in the same jurisdiction. The court combined the cases. They argued that the overtime rule would have disrupted many small employers who could not be ready by the deadline. It was to have taken effect Dec. 1, 2016, but a delay in implementation was granted until the case was heard.