Small Business Leads Court Fight to Block DOL Overtime Rule

Date: September 20, 2016

Contact: Kelly Klass at (609)713-4243

NFIB says the agency exceeded its authority by nearly doubling the overtime threshold

Washington, D.C. (September 20, 2016) – The Department of Labor stepped far beyond its statutory authority when it made millions more employees potentially eligible for mandatory overtime, says the National Federation of Independent Business (NFIB) in a suit filed today in federal court.   

“The Obama administration continuously proves that it doesn’t care about the small business sector and the problems that they are facing,” said NFIB Small Business Legal Center Executive Director Karen Harned.  “This administration has repeatedly used its executive power to implement new rules and regulations on the small business community without considering the economic effects as the law requires.”

Joining NFIB in the lawsuit are the U.S. Chamber of Commerce and more than 50 business groups across the country. The coalition filed its case today in the United States District Court, Eastern District of Texas. A separate coalition of 21 states today also filed a lawsuit challenging the rule. 

In May, the DOL issued its new overtime rule, under which salaried workers making below $47,476 must be paid overtime.  That new figure nearly doubles the previous threshold of $23,660, potentially making more than 5 million employees suddenly eligible for overtime.

The rule is set to take effect on December 1, 2016, a deadline that many small employers simply cannot meet. 

“In many cases, small businesses must reorganize their workforces and implement new systems for tracking hours, recordkeeping, and reporting,” said NFIB President and CEO Juanita Duggan.  “They can’t just flip a switch and be in compliance.”

In addition to its legal challenge to block the rule, NFIB is trying to persuade the DOL to extend the deadline to give small businesses a reasonable chance to make the adjustments.  Last week, the organization filed a petition with the department formally asking that the deadline be pushed back until June 1, 2017.     

“We’re working with Congress on a bipartisan solution.  We are challenging the regulation in court.  We are also trying to prevail on the Department of Labor for a more realistic timeframe,” said Duggan.  “It’s obvious that the Department of Labor did not fully consider the impact on small business when it raised the overtime threshold and imposed an arbitrary deadline.  Now we’re fighting on every front to minimize the damage.”

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