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November 23, 2016

New Overtime Laws Put on Hold

Overtime laws set to take effect in just over a week are now on hold due to a nationwide injunction issued by a federal judge in Texas which blocks the Department of Labor’s rule, scheduled to go into effect December 1, 2016.

In a 20-page decision, U.S. District Judge Amos L. Mazzant ruled that 21 states and more than 50 business groups that sued to block the rule would suffer serious financial harm if the rule was put into effect as scheduled.

Texas Attorney General Ken Paxton and Nevada Attorney General Adam Laxalt are co-leaders of the 21 state coalition. Paxton’s office claims that the new overtime rule “more than doubled the salary threshold for a worker to be entitled to overtime, which would force many state and local governments, as well as private businesses, to substantially increase their employment costs.”

On the opposing side, US Secretary of Labor Thomas Perez argues that over time protections are in need of being updated. He points out that they applied to 62 percent of U.S. full-time salaried workers in 1975, but only 7 percent today.

The injunction halts enforcement of the rule until the government can win a countermanding order from an appeals court. In the meantime, businesses and retailers who would be particularly hard-hit by the rule are breathing a sigh of relief while wage earners  anxiously awaiting the anticipated increase in earnings set to begin next week are deeply disappointed.

November 23, 2016