US businesses cheer overtime ruling; many already upped pay

By MICHELLE RINDELS

LAS VEGAS (AP) — Businesses around the country on Wednesday cheered a court decision blocking the Obama administration's sweeping new overtime rules, but many had already raised salaries or ordered managers to stick to a strict 40-hour workweek to avoid costs they expected to incur starting next week.

An injunction issued Tuesday by the federal court in the Eastern District of Texas prevents the Department of Labor from mandating overtime pay for salaried employees who make less than about $47,500 a year — a dramatic jump from the old threshold of $23,660.

More than 4 million workers would have been newly eligible for time-and-a-half pay under the rule, which now faces far more uncertainty from Donald Trump's incoming administration.

The ruling giving businesses a reprieve "is a little late for a lot of people's taste," said Tom Gimbel of Chicago-based LaSalle Network, a staffing firm that advised companies on how to prepare for the new rule. "A lot of companies had already rolled it out."

Wal-Mart, for example, raised entry-level managers' starting salaries by $3,500 in September to stay above the threshold. But there were also raises among clerical workers for Opportunity Village in Las Vegas, a nonprofit that teaches vocational skills to people with disabilities and raises its money through private donations and running a thrift store.

Opportunity president Bob Brown said he couldn't bear to backtrack on the decision.

"It's put us in a difficult situation — you're spending money you wouldn't have been spending," he said.

In Colorado, some restaurant owners operating on thin margins shifted salaried managers to hourly pay so they could better track their hours and cap them at 40.

"That was demoralizing for managers who felt they were being demoted," said Sonia Riggs, CEO of the Colorado Restaurant Association.

The Department of Labor last May ordered the changes to give overtime to many more American workers, saying they would "go a long way toward realizing President Obama's commitment to ensuring every worker is compensated fairly for their hard work."

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