Employers across the nation—including those in Montgomery County—are adjusting their compensation plans to adhere with new overtime regulations from the Department of Labor that were originally scheduled to go into effect Dec. 1.

The new rule was announced in May and would extend overtime protections to more than 4 million salaried workers who did not already qualify for overtime, according to the DOL. Under the rule, salaried workers who earn $913 or less per week—or $47,476, annually—would be entitled to overtime compensation.

However, businesses, chambers of commerce and state officials have expressed concerns about the effect the rule will have on employers and employees.

On Nov. 22, a federal judge from Texas sided with business and community leaders, filing an injunction blocking the implementation of the rule. The injunction is a response to two lawsuits filed against the DOL. The first lawsuit was filed by more than 50 business organizations, including the Texas Association of Businesses. A second lawsuit was filed by 21 states, including Texas.

“Obviously, we are happy that the judge saw the business side of the case,” TAB President Chris Wallace said. “While we all want higher wages for employees, employers have to be treated fairly to be able to provide the jobs. This is a big win for employers of our state and our country.”

The U.S. Department of Justice filed an appeal Dec. 1 to the preliminary injunction granted by Judge Amos Mazzant Nov. 22.

“The [DOL’s] overtime final rule is the result of a comprehensive, inclusive rule-making process, and we remain confident in the legality of all aspects of the rule,” according to a statement from the DOL.

The overtime law change was requested at the behest of President Barack Obama to address the effect of economic inflation since the rule’s last update in 2004. Currently, salaried workers who earned less than $455 per week—or $23,660 per year—were entitled to overtime compensation.

“The white collar exemption originally was meant for highly paid workers who had better benefits, job security and opportunity for advancement,” said Robin Mallet, DOL Wage and Hour Division director of the Houston district office. “Unfortunately, the salary threshold had not changed over the years, so it has been eroded by inflation. So the final rule is bringing back into line with inflation as it is today.”

The law provides three options for employers who would be affected by the new rule. Employers can increase the salary of its employees to the new threshold, compensate employees for overtime worked at 1.5 times the employee’s regular rate of pay, or reduce or eliminate any overtime work.

The elevated threshold could put more money in the pockets of middle-class workers, Mallet said.

Despite these anticipated positive side effects, J.J. Hollie, The Woodlands Area Chamber of Commerce president and CEO, said he feels the negatives far outweigh the positives.

“We’ve had to do some major salary adjustments and organization changes ourselves,” Hollie said. “The chamber is a small business just like any other small business in the country and, quite frankly, it’s very intrusive of the federal government to micromanage how a small business is going to organize its staff and pay its staff.”

Other local businesses have voiced similar concerns to the chamber about the new regulation, Hollie said. These concerns were brought up during roundtable discussions with U.S. Rep. Kevin Brady, R-The Woodlands, who co-sponsored a bill that would have delayed the rule by six months.

“The rule sounds good on paper but will actually harm workers who are trying to move from hourly positions to salaried management positions so they can grow their career,” Brady said. “The purpose [of the resolution] is to kick it to the next White House administration and give Congress a chance to block this rule so that it can hopefully be rewritten in a way that doesn’t harm workers and local businesses.”

In an attempt to make the transition as smooth as possible for chamber members, the chamber held a seminar in August to help local business owners understand the new regulation and what preparations needed to be made before Dec. 1.

“I would like to see the new regulation rescinded,” Hollie said. “I think the free market is the best way to know how to employ people, what salaries they should make and how staffs should be organized.”