Federal Judge Blocks Overtime Rule

In a victory for NAHB, a federal judge in Texas on Nov. 22 granted a preliminary injunction to delay implementation of the Department of Labor’s new overtime rule. The rule, which was scheduled to take effect Dec. 1, would double the overtime salary limit from $23,660 to $47,476.

NAHB joined other business groups in filing a legal challenge to the overtime rule on Sept. 20. The lawsuit was filed in the U.S. District Court for the Eastern District of Texas. In addition, 21 states have also filed suit challenging the rule and the two lawsuits have been consolidated. The parties have filed motions for a summary judgment.

While the injunction is only temporary, the ruling by Judge Amos Mazzant sent a strong signal that he could likely side with NAHB and our business coalition.

“The State Plaintiffs have shown a likelihood of success on the merits because the Final Rule exceeds the Department’s authority,” Mazzant wrote in his opinion.

Working with House and Senate lawmakers and members of our business coalition, the Partnership to Protect Workplace Opportunity, NAHB has been leading the effort to mitigate the effects of the overtime rule. In addition to the lawsuit, the association is asking Congress to phase-in the new salary requirements, as well as provide permanent relief from the rule’s provision to automatically update the salary threshold every three years.

It is uncertain what the incoming Trump administration will do on overtime next year, but legislative and regulatory action will not be needed if the rule is ultimately struck down in the courts.

As NAHB keeps working toward permanent relief, the association will continue to provide members with the tools they need to comply with the new overtime requirements in the event that the court rules against NAHB, our business coalition and the 21 state attorneys general.

For more information, contact Felicia Watson at 800-368-5242 x8229 or  Suzanne Beall at x8407.