Just as San Diego employers were preparing to implement the new Department of Labor (DOL) rules regarding the Fair Labor Standards Act and overtime exemption and income thresholds a significant change has forced an immediate hold for many small and mid-sized San Diego businesses. A Texas Judge has issued a hold on new overtime laws and granted a preliminary injunction which blocks the new DOL rules. How will this affect payroll strategies and business taxes?
Twenty-one states have joined small business advocates and interests groups to challenge the new rules and provide an opportunity for greater legislative review and judicial input. The new federal overtime rules instituted this summer by the DOL were set to take effect December 1st. Judge Amos Mazzant, a federal judge in Texas has issued the “preliminary injunction” that places a hold on the new overtime rules were expected to affect more than 4.2 million workers nationwide.
Many area restaurateurs and food service businesses, retailers, service providers and other small business entities have changed the way they do business in preparation for the rules which were to take place December 1st. Many San Diego area businesses have undertaken substantial change and borne significant expense. The news may be considered to be “good news” for many local business owners and entrepreneurs.
“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. This organization and many other business groups and advocates believe the changes would have forced an increase in labor costs impacting many area small business owners. The new laws have affected morale throughout many area businesses while managers struggle to analyze the impact of these regulations on business operations and ultimately the profitability of their companies.
What will happen now that a Texas Judge has issued a hold on new overtime laws set to take place December 1st? What impact will this have on San Diego employers? The business, contract and tax attorneys at Allen Barron will guide you through this process. We invite you to contact us for a free consultation at 866-631-3470.