WASHINGTON—The Justice Department announced it will appeal a Texas federal judge’s preliminary injunction delaying the Labor Department’s overtime rule, which had been set to go into effect this week, NAFCU reported.
“The injunction by Judge Amos Mazzant of the Eastern District of Texas in Sherman, Texas, is only temporary, but it is possible that he will side with 21 state attorneys general that claim the overtime rule will increase costs and force the cut of essential government services,” NAFCU noted in its analysis.
The rule would raise from $23,660 to $47,476 the salary threshold at which employees are eligible for overtime pay under the Fair Labor Standards Act.
NAFCU has supported efforts to delay the rule due to its impact on credit unions. In November, NAFCU wrote several House members to express support of their bill to phase in the salary changes in the overtime rule. The “Overtime Reform and Enhancement Act” (HR 5813) would phase in the rates of pay for executive, administrative, professional, outside sales and computer employees, which NAFCU said would be beneficial to credit unions.
NAFCU has raised several concerns about the rule’s potential unintended consequences for small businesses like credit unions, many of which would not have been able to comply without cutting member services.