The Louisiana Association of Business and Industry is speaking out in support of a nationwide temporary injunction a Texas judge issued on Tuesday, blocking the Obama administration from implementing a new rule that would make millions of American workers eligible for overtime pay protections.
The rule was scheduled to take effect on Dec. 1, and would have raised the salary threshold at which workers automatically qualified for overtime pay to $47,476 from $23,660.
But as The New York Times reports, the judge, Amos L. Mazzant III of the Eastern District of Texas, ruled that the Obama administration had exceeded its authority by raising the overtime salary limit so significantly.
Business groups—LABI among them—are hailing the judge’s ruling, arguing the new rule would be costly and result in fewer hours for workers.
“This nationwide injunction will not only benefit every business across the state, but it will also provide some relief to those Louisiana employers who are continuing their extensive recovery efforts from the recent flood,” says LABI Small Business Director Renee Amar.
An estimated 61,000 Louisiana workers will be eligible for overtime pay protections under the rule, with which local businesses and human resources departments have scrambled to figure out how best to comply.
In September, LABI sent a letter to U.S. Labor Department Secretary Thomas Perez, asking the federal agency to delay implementation of the rule in Louisiana parishes declared disaster areas as a result of the August flood. The association argued that flood-devastated businesses needed more time to adjust and prepare for the impact of the rule.
The Labor Department says it “strongly disagreed” with the judge’s decision and was considering all legal options, raising the possibility of an appeal in the waning days of the Obama administration.
The New York Times reports that while the injunction is only a temporary measure that suspends the regulation until the judge can issue a ruling on the merits, many say the judge’s language indicates that he’s likely to strike down the regulation.
“We are, assuming that this preliminary injunction holds and there isn’t an appeal or some other thing that disrupts it, done with this regulation,” says Marc Freedman, executive director of labor law policy at the U.S. Chamber of Commerce, which had challenged the rule.
Tuesday’s ruling arose from a case filed by a coalition of 21 states that argued the administration had exceeded its statutory authority in raising the overtime salary limit so significantly. A large number of business groups filed a similar lawsuit, and the two were later consolidated.
In September, LABI also pledged support to the coalition of states that filed a federal court complaint challenging the U.S. Department of Labor’s overtime rule.
