Federal Judge Rules Against Overtime Rule


Victory! Since its introduction in July 2015, IWLA has advocated strongly against Obama’s overtime legislation which more than doubled the salary threshold of non-exempt workers to receive overtime compensation. Here’s a timeline of events of IWLA’s efforts:

July 6, 2015 – the U.S. Department of Labor (DOL) proposes overtime rules, since they had not been changed in 40 years.  President Obama said that employers had been taking advantage of employees: “Of course, nothing helps families make ends meet like higher wages…We still need to make sure employees get the overtime they’ve earned.” – President Barack Obama, State of the Union Address, January 20, 2015. In mid-July, IWLA Washington Representative Pat O’Connor attended a round table at the U.S. Chamber of Commerce to draft comments opposing the new rule.

Aug. 19, 2015 – IWLA joins the Partnership to Protect Workplace Opportunity Coalition (WPPO), supporting the belief that “employees and employers alike are best served with a system that promotes maximum flexibility in structuring employee hours, career advancement opportunities for employees, and clarity for employers when classifying employees.” WPPO formally requested a 60-day extension on the comments period.

Sept. 4, 2015 – IWLA signs onto WPPO comments sent to DOL outlining the harm of the overtime rule on employers and employees.

Dec. 7, 2015 –  IWLA signs onto another WPPO letter requesting that the DOL reconsider the overtime citing: “The magnitude of DOL’s proposal, coupled with the annualized automatic increases with no feedback from employers, and the changes to the duties test that DOL is considering, threaten businesses, employees, non-profits, state and local governments, and the economy as a whole.”

Feb. 3, 2016 – IWLA launched a letter writing campaign, urging members to contact senators and representatives immediately to prevent the DOL from imposing unnecessary and harmful changes to overtime. The goal was to continue to apply pressure on leaders in Washington to stop the DOL from implementing these overtime changes. A change of this magnitude is likely to have unintended consequences regarding how an employer compensates its employees which would negatively affect workers. Many small businesses, which often operate on thin margins, yet still pay competitive salaries, simply cannot afford to increase their workers’ salaries to the new salary threshold that has been proposed.

April 20, 2016 IWLA issues another call to action for members to write letters to their senators and representatives asking for their support of the Protecting Workplace Advancement and Opportunity Act (S. 2707/H.R. 4773). This act would have required DOL to perform additional analysis on the impact the agency’s proposed changes to the overtime regulations would have on employees, businesses, and the economy. It would also require a federally mandated review and comment period for any proposed changes to the duties test and block any automatic annual increases to the salary threshold.

June 22, 2016 – Rep. Virginia Foxx (R-N.C.) introduced H.J.Res. 95, a Congressional Review Act resolution to nullify the overtime rule with all Republican committee members as original cosponsors. The resolution is identical to the Senate CRA resolution, S.J.Res.34.

July 22, 2016 – IWLA writes a letter to Representative Kurt Schrader, (D-Ore.) to express our strong support for your legislation, H.R. 5813, the Overtime Reform and Enhancement Act.

Sept. 20, 2016 – IWLA joined a lawsuit to block the U.S. Department of Labor’s (DOL) new federal overtime regulations, arguing that DOL exceeded its statutory authority in issuing the regulation and violated the Administrative Procedure Act. The DOL’s rule is currently slated to take effect Dec. 1. IWLA joined with the U.S. Chamber of Commerce, the National Association of Manufacturers, and others in filing the lawsuit in the U.S. District Court for the Eastern District of Texas.

Nov. 1, 2016 – IWLA writes a letter to Sen. Lamar Alexander (R-Tenn.), Chairman of the Senate Committee on Health, Education, Labor and Pensions, to give our support to his legislation, S.3464, the Overtime Reform and Review Act.

Nov. 22, 2016 – A Texas federal judge issued a preliminary injunction halting the Obama administration’s overtime rule. U.S. District Judge Amos L. Mazzant ruled that federal law does not allow exemption eligibility to be based on salary alone. The rule, he wrote, “creates essentially a de facto salary-only test.”

After nearly two years of fighting against the overtime rule, IWLA members have prevailed! This is a great example of how the advocacy process works, and how business leaders can ban together to fight laws that over step the government’s boundaries. Based on the timeline, these efforts require a great deal of time and persistence. But in the long-term, keeping pressure onto lawmakers to do what is right is essential to protecting our rights as business owners and Americans. Congratulations IWLA on a job well done!

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