The new federal overtime rules approved as part of the Fair Labor Standards Act were set to take effect December 1st. With the new federal overtime rules on hold many San Diego employers are wondering what to do? A federal Judge in Texas, The Honorable Amos Mazzant, has granted a “preliminary injunction” that places the new Department of Labor rules on hold. The new overtime rules were expected to affect more than 4.2 million workers and employers throughout San Diego and across the United States have been preparing for this transition for months.
Were all of these changes and preparations in vain? Not from the perspective of many small and mid-sized businesses throughout San Diego. “This is a victory for small business owners and should give them some breathing room until the case can be properly adjudicated,” said Juanita Duggan, CEO of the National Federation of Independent Business. The Federation has joined twenty-one states to challenge the modification of existing overtime rules. Many believe the changes would have unfairly swelled labor costs and forced small business owners and corporate managers to actually demote existing supervisors and other presently “exempt” personnel creating issues surrounding morale and the culture of the workplace.
Many business and political leaders believe the issue has not received appropriate legislative and judicial review and are simply seeking to slow the process down. The Department of Labor and other labor advocacy groups suggest the new rules would help to increase incomes and narrow the gap between the upper classes and low to middle income family households. Many area service entities, restaurants and food service providers, retailers and other small businesses have taken substantial steps (and endured substantial costs) to be prepared for the implementation of the new rules.
How will this resolve? What should San Diego employers do with new federal overtime rules on hold and new administration coming into the Oval office? The employer defense and general business counsel attorneys at the Watkins Firm will continue to closely monitor the situation and keep our clients abreast of these changes and all modifications to federal, state and local laws and regulatory requirements. We invite San Diego employers to contact us for a free consultation at 858-535-1511 to learn about all of the services we offer to support and protect the position and profitability of San Diego employers.