Federal Overtime Ruling Leaves U.S. Businesses With Questions

December 2, 2016

The ruling by a federal judge in Texas last month that issued a preliminary injunction on a new federal rule that would have made more than 4 million American workers eligible for overtime pay, has now left businesses nationwide in limbo.

The U.S. Department of Labor amended the overtime rule to provide time-and-a-half to employees who worked more than 40 hours a week and earned less than $47,892 annually, which is up from the current $23,660 per year. The 21 states and several industry groups sued to block the rule, and U.S. District Judge Amos Mazzant III granted a temporary delay on Nov. 22.

Cook-Illinois Corporation President and Chief Operating Officer John Benish, like many business owners throughout the country, is now in a difficult situation, due to the holdup: Whether the company needs to observe a law they were in the process of preparing for.

“We have been trying to comply with the possible law change, but as you are aware, that could change,” he said. “So, we shall see.”

The Cook-Illinois Corporation for more than a half-century has employed thousands of people to transport students to and from school in the Chicago area. Today, the company is the largest family-owned and operated school bus contractor and the sixth-largest among all school bus companies in the U.S.

The Obama administration filed an appeal on Dec. 1, which means the case could potentially end up in front of the U.S. Supreme Court. But this is a prolonged process and a new administration is taking office on Jan. 20.

President-elect Donald Trump has already voiced opposition to this regulation, so until a final verdict is reached, business leaders are stuck in a holding pattern.

“I cannot really tell you much until the law gets passed,” Benish said.