Small Business Leads Court Fight to Block Overtime Rule
The United States Department of Labor stepped beyond its statutory authority when it made millions more employees potentially eligible for mandatory overtime. So says the National Federation of Independent Business (NFIB) in a suit filed last week in federal court.
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 in the United States District Court for the Eastern District of Texas. A separate coalition of 21 states 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 five-million employees suddenly eligible for overtime.
The rule is set to take effect on December 1, 2016, a deadline that many small employers cannot meet, according to the NFIB.
“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. The organization filed a petition with the department formally asking that the deadline be pushed back until June of 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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