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Injunction Be Damned! Businesses Forge Ahead With Overtime Changes

Dec 05, 2016

The vast majority of small businesses will go ahead with changes they’ve made to worker pay even as the Obama administration’s new overtime rules have been sidelined, according to a new poll.

Th e new overtime rules, announced by the Department of Labor in May, would have increased the salary threshold for overtime pay to $47,476 -- nearly double the level that’s been in place since 2004. That means any employee earning under that amount would have been owed overtime, or time-and-a-half, for working more than 40 hours a week. The move was expected to increase wages and earnings for some 4.2 million workers, according to the DOL.

The rules were supposed to take effect on December 1, but a federal judge issued a temporary injunction just before Thanksgiving, saying the administration had overstepped its executive authority.

Since May, thousands of small businesses rushed to comply with the new regulations by either switching workers to hourly compensation schedules form salaried positions, or by giving existing workers raises above the new threshold.

The injunction means they can walk back those changes, even while a federal appeals court considers an appeal.

But a whopping 84% of small businesses say they still plan to implement their overtime changes , according to a survey out Monday from small-business network Manta. What’s more, nearly two-thirds of the poll respondents said they were indifferent to the proposed overtime changes, which were a hotly contested flashpoint for business lobbyists and others.

Earlier in the year, 21 states and 50 business groups including the U.S. Chamber of Commerce and the National Federation of Independent Business filed two separate suits against the Obama administration over the regulations. They were joined by Judge Amos Mazzant, of the U.S. District Court for the Eastern District of Texas. In his November 22 ruling, Mazzant said the Obama Administration had exceeded its executive authority both in the amount by which it raised overtime salary thresholds, and by requiring new increases every three years, indexed to inflation.

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The Obama administration appealed the injunction last Thursday in the U.S. Court of Appeals for the Fifth Circuit in New Orleans. It could take months to settle the judicial challenge, legal experts say.

Some large businesses, such as TJX Companies, owner of Marshalls and TJ Maxx, have said they also plan to keep the changes they’ve made to overtime regulations. In October, retailing behemoth Walmart announced it would raise pay for its full-time salaried workers to $48,500 to avoid the threshold altogether.

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