On Tuesday, Texas U.S. District Judge Amos Mazzant temporarily halted the U.S. Dept. of Labor’s contentious overtime rule from going into effect on Dec. 1. The judge issued a temporary injunction to give the courts more time to evaluate the Department’s authority to issue the rule along with the merits of the rule.
The regulation, which doubles the salary threshold for determining if an employee is exempt from overtime pay, is expected to cost employers in Kentucky $19 million in added labor and compliance costs. The rule also provided for an automatic change to the threshold every three years without a formal rule-making process.
Because of the cost of the rule on Kentucky businesses, the Ky. Chamber opposes the rule and urged Congress to support the Protecting Workplace Advancement and Opportunity Act earlier this year. The legislation would have stopped the rule from taking effect and would have required the U.S. Dept. of Labor to consider economic implications of the rule.
The temporary injunction is significant because review of the rule by the courts will likely stretch into the next administration and session of Congress. This will give Congress time to act on the regulation such as by passing the Protecting Workplace Advancement and Opportunity Act. Additionally, President-elect Trump could choose not to defend the rule in court. The overtime rule is one of many regulations President-elect Trump voiced opposition to during the campaign.