Hays County area small business owners breathed a sigh of relief Nov. 22 when Texas Judge Amos Mezzant of the U.S. District Court of Eastern Texas filed an injunction against new overtime rules that were scheduled to go into effect Dec. 1.
According to a press release, Mezzant filed the injunction because the Department of Labor effectively created a “salary test,” which, according to him, is exceeding its authority.
The order for the temporary injunction will hold until further court review. According to the release, the injunction has received support from multiple state governments that are arguing against an increase they believe could harm employers.
The rules would have doubled the federal salary for full time employees to receive overtime pay from $23,000 to $47,476. Those changes meant small businesses that pay employees based on hours worked might have to cut hours or even cut staff to meet the new standards.
J.R. Gonzales, managing director of the Buda Area Chamber of Commerce, said the injunction could be good for small business owners who now have more time to prepare themselves for the salary increase without negatively affecting their staff.
“This is a good thing. It gives people the time they need to examine the law and make adjustments if needed,” Gonzales said.
Gonzales admitted that when he first saw the announcement scroll across his Twitter feed, he thought it was a hoax.
After some research, he found out the injunction delays the new salary increase until a later date, most likely next year.
“People can look at the long-term economic effects and business owners will have more time to plan and adjust,” Gonzales said.
Julie Snyder, CEO of the Kyle Area Chamber of Commerce, also said the delay in the new legislation was a benefit to small businesses.
“This is good news for us,” Snyder said.
Snyder said a speaker at the KACC monthly luncheon said the injunction only delayed the salary increase instead of disbanding it.
“This is a big win for the small business community,” Snyder said, “It will give employers time to look at the proposed new overtime rules and make beneficial changes so they don’t lose their employees.”
Snyder suggested that one way of doing this was for employers to coordinate with their Human Resources department or a certified public accountant (CPA). Employers could adjust employees; salary and/or hours to include the overtime pay, instead of cutting the employees hours entirely.
Vicky Lewis, owner of Mazama Coffee House in Dripping Springs, was unconcerned about the possible rule change in the New Year. She believes that no matter how high the increase, her business will not suffer.
“The majority of my employees are part-time college students,” Lewis said, “We are very careful with scheduling and very rarely do we have employees working overtime except for special events.”
Even with a new location set to open later this week, Lewis was confident her staff and business would continue to thrive into 2017.
“Whether the rule goes into effect or not, I don’t see any impact to my business at this time at either location,” Lewis said.
Even with the news of the new overtime rules delay, Gonzales is hopeful that Buda businesses will continue to operate smoothly with the help of the chamber.
“As a Chamber it’s our job to make sure that businesses stay open and staffed and that the local economy stays strong,” Gonzales said.
