Labor law on hold

In November, Texas Federal Judge Amos Mazzant entered a preliminary injunction blocking the implementation of the Department of Labor’s overtime rules for salaried employees that was due to take effect Dec. 1.

Judge Mazzant issued the emergency motion for 21 states seeking relief from the new overtime rule. By stating that the DOL had overstepped its role and that the new regulations were inconsistent with what Congress intended for these exemptions, the federal judge temporarily derailed the new overtime pay rules.

During the run-up to the fall election day, this paper listed the new DOL overtime rule as one more impediment to small business success and job creation. If the DOL rule is ultimately overturned (the DOL will appeal the judge’s ruling), there will be more evidence that partisan bureaucratic rule-making has reached beyond the intentions of Congress and has created a foul, contentious climate for general governing and tainted the perspective of the citizens meant to be served.

Implementing wage and overtime laws by fiat has a detrimental effect on both businesses and employees. Data clearly shows depressed employment after these changes, less business expansion, as well as lower youth employment ratios across the work spectrum.

There also is a flip side. Some businesses have played fast and loose with overtime compensation rules, inviting the sort of criticism now being directed by the DOL. And citizen initiatives for increased minimum wage laws will continue to sweep across the states, gaining momentum after victories like the one in Maine this fall.

These national revision proposals try to make one shoe fit all, and the consequences can be severe. The states are asking for relief to make these labor rules fit their economic situations.

The judge’s ruling is a temporary hedge against better rule-making with both labor and business reaching a compromise together, a new administration coming into office in January which may dump the whole initiative, or one final shove by the current DOL to create a legacy.

The best solution is the former, businesses working to implement socially acceptable policies that benefit employee and employer mutually. Short of that, partisan special interests-driven efforts to make significant changes in compensation levels will persist and alter the social fabric in ways that will further stymie economic growth for many small businesses and their communities. That is bad for everyone.

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