Updated Dec. 2, 12:15 p.m.

On Monday, Dec. 1, the U.S. Department of Labor appealed the preliminary injunction granted by U.S. District Court Judge Amos Mazzant against the DOL's overtime rule.

The appeal was filed in the U.S. Circuit Court of Appeals for the Fifth Circuit on behalf of the DOL.

In its appeal, the DOL said it disagrees with the court's ruling that the department does not have the statutory authority to apply the rule.

“The [rule] is the result of a comprehensive, inclusive rule-making process, and we remain confident in the legality of all aspects of the rule,” the DOL said in a statement.

Additional reporting by Jesse Mendoza

Austin business owners react to overtime law injunction

Posted Nov. 23, 5:10 p.m.

On Tuesday, Nov. 22 the U.S. District Court Eastern District of Texas granted a preliminary injunction against the updated Fair Labor Standards Act, or FLSA, scheduled to take effect Dec. 1. In light of the injunction, Austin-area business owners are reevaluating their plans to comply with the revised law, which would have extended overtime protection to more than 4 million salaried workers nationwide.

For businesses that had already made adjustments in anticipation for Dec. 1, the question now is whether to reverse those changes or to wait and see what happens next.

Steven Bercu, president of the Austin Independent Business Alliance and owner of BookPeople on North Lamar Blvd. in Austin, expects that most businesses will hold off on making any drastic changes until a more permanent decision has been made.

"I have a feeling very few people will change much of anything based on this decision," he said. "I think they will stick to the changes they have already made, and if they were waiting to implement, they will keep waiting."

In order to comply with the updated rule, Bercu had converted some of his employees from salary to hourly wages, while others had received a pay raise to meet the new threshold.

"We made some adjustments last month based on the original date, and we are not going to change those," he said. "We will keep what we did, and the adjustments we had failed to make, we just won't make."

As the owner of helpdeskHR, South Austin Business Association member Shasta Erickson offers customized, scalable human resource solutions to small businesses. In the interest of maintaining employee morale, she says business owners should proceed with their current plans.

"If they’ve already put changes into place, they should probably keep those in place until we know for sure," she said. "If you make another change now and you know you'll probably have to make another change again, from a morale standpoint it's better to wait it out and see what happens."

For those who have held off on implementing any changes, such as owner of home repair and remodeling business Anything Around the House Servando Varela III, the injunction buys more time.

"We have a few weeks so we are going to wait to see what happens and go from there," he explained. "We will look at the decision and evaluate the next step."

Under the new rule, most salaried workers who earn $913 or less per week—or $47,476 annually—would be entitled to overtime compensation at one and a half times the hourly rate. If implemented, the rule would apply to approximately 370,000 workers in Texas.

Two lawsuits were filed against the overtime threshold update. The first was filed by more than 50 business organizations, including the U.S. Chamber of Commerce and the Texas Association of Business. The second lawsuit was filed by 21 states, including Texas. The lawsuits were later consolidated.

Opponents of the rule argued that it would force many state and local governments, as well as private businesses, to substantially increase their employment costs. TAB President Chris Wallace said the rule also did not consider the varying effects it would have on different industries.

Still, it comes as a surprise to many that the rule was blocked with only two weeks until the regulations were supposed to take effect.

"We expected that there was going to be a change with the new administration, but that they have totally postponed it with this emergency injunction is kind of a surprise," Erickson said. "It's really at the 11th hour."

Additional reporting by Jesse Mendoza