Victory: Federal Court Strikes Down Overtime Rule Expansion

Date: September 05, 2017

Victory: NFIB Applauds Federal Court’s Decision Striking Down Unfair Overtime Rule

The National Federation of Independent Business (NFIB) applauded a decision by a federal judge in Texas to strike down the Department of Labor’s overtime rule, which would have overburdened small businesses with heightened labor expenses by making millions of workers qualify for overtime pay.

In an expedited summary judgement, the ruling made permanent the temporary injunction the court had imposed against the controversial overtime rule last November. The ruling was a huge victory for small business.

Originally scheduled to take effect last December, the Obama-era overtime rule would have enabled 4.2 million employees to be eligible for time-and-a-half wages for every hour worked over the standard 40 hours per week. If the overtime rule had been allowed to stand, it would have driven up the cost of doing business for employers across the country.

This case was brought by NFIB and more than 55 other business groups in the U.S. District Court for the Eastern District of Texas.

The regulation would have doubled the salary threshold below which employees are eligible for mandatory overtime. According to NFIB research, 44 percent of small businesses employ at least one person who would be eligible under the rule.

NFIB opposed the rule when it was announced by the Department of Labor in early 2016. According to NFIB’s Small Business Legal Center, it would increase labor costs for small businesses by forcing them to pay overtime to millions of additional workers.

What NFIB has been doing to Fight the Rule

  • NFIB members have sent thousands of communications to Congress calling for relief.
  • NFIB filed a lawsuit against the Department of Labor for stepping far beyond its statutory authority when it made millions of more employees potentially eligible for mandatory overtime.
  • NFIB sent a letter in support of S. 3464, the Overtime Reform and Review Act. This legislation would mitigate the adverse impact on small businesses of the U.S. Department of Labor’s (DOL) overtime rule and allow employers additional time to plan for payroll changes.
  • The House of Representatives has passed H.R. 6094 by a vote of 246-177. The bill, which would delay the overtime rule changes for six months, was an NFIB key vote. NFIB is now encouraging the Senate to take action.
  • NFIB sent a letter to the Secretary of Labor asking to extend the deadline for compliance with this rule. Even with a delay, NFIB remains opposed to the rule and its policy team is pushing for legislation to repeal it altogether.
  • NFIB sent letters to Congress to support the Protecting Workplace Advancement and Opportunity Act. S. 2707 in the Senate and H.R. 4773 in the House of Representatives. These bills would protect small businesses and their employees from the overtime expansion rule by blocking enforcement of the rule.
  • NFIB sent a letter in support of H.R. 5813, which would phase-in the implementation of the overtime rule.
  • NFIB filed a letter with DOL vehemently objecting to the proposed new rule.
  • NFIB sent a letter of support for key provisions addressing the new overtime rule in the FY2017 Labor, Health and Human Services, Education, and Related Agencies Appropriations Act.

More information:

Overtime Rule in the News


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