A recent ruling by the U.S. District Court for the Eastern District of Texas struck down the Department of Labor's (DOL) overtime rule, marking a significant win for small businesses.
The case, Plano Chamber of Commerce, et al v. DOL, was bolstered by an amicus brief from the U.S. Chamber of Commerce which argued against federal regulatory overreach.
Background
The DOL's overtime rule aimed to increase the minimum salary threshold for exempt employees under the Fair Labor Standards Act (FLSA) from $35,568 annual salary ($684 per week) to $58,656 annual salary ($1,128 per week). This change, scheduled to fully take effect January 1st, would have required many small employers to reclassify their top staff from salaried to hourly workers. Additionally, DOL’s rule scheduled an expansion of overtime employees every 3-years starting in 2027. The U.S. Chamber of Commerce’s amicus filing emphasized how workers prioritize flexibility when working at small firms and how DOL’s rule limits that employee flexibility.
Court's Decision
The court agreed with the arguments presented by the Plano Chamber of Commerce and the U.S. Chamber of Commerce Litigation Center and emphasized that DOL’s one-size-fits-all wage structure could lead to increased prices for consumers and harm small businesses.
Implications
This decision is seen as a victory not just for the Plano Chamber of Commerce and for small businesses, but for all businesses facing federal regulatory overreach. It reinforces the importance of chambers of commerce at a local, state, and national level advocating for policies that support free enterprise and protect against unnecessary micro-management by the government.
Small Business Owner’s Perspective
Michael Canty, President & CEO of Alloy Precision Technologies in Mentor Ohio, serves on the U.S. Chamber of Commerce Small Business Council and followed DOL’s overtime rule closely. He provided the following statement:
“I am proud of my company that helps provide for the families of 96 employees and produces custom-engineered metal bellows and metal tubing for customers in the aerospace, nuclear, and biomedical fields.” “I am active and engaged with the U.S. Chamber of Commerce because they fight back against federal overreach. I am optimistic that this victory striking down Department of Labor’s intrusion over wage rates will encourage other regulators to think twice before exceeding their authority and making my life as an employer more difficult.”
