CUNA welcomed an action by a federal judge in Texas who granted a preliminary injunction to delay implementation of a Department of Labor rule that would extend overtime eligibility. The rule was set to go into effect Dec. 1.
CUNA has pushed for a delay, warning that the threshold change will magnify the regulatory burdens and constraints credit unions already face. That, in turn, has the potential to negatively impact credit union members, particularly if the credit unions are forced to limit services as a result of changed employment situations or the inability to hire full-time employees. There is also a concern that the unintended negative consequences of the rule could outweigh any potential benefit, even to those employees it aims to help.
CUNA and the League system have strongly advocated a delay so the agency has time to fully assess the severe impact the plan would have on credit unions, especially smaller ones and those in non-metropolitan areas, and also on their members.
“We welcome the decision. This is an issue on which the CUNA/League system has been engaged for some time,” commented CUNA Chief Advocacy Officer Ryan Donovan.
"We’ve felt from the beginning that the Department of Labor’s proposal was overbroad and extreme and could have unintended consequences on credit unions and other small businesses. We expressed our concern to the Department of Labor in our comment letter in September 2015 and we’ve been encouraging Congress to address this rulemaking ever since. We are pleased that the court has made its decision.”
The DOL’s overtime rule, finalized last May, would raise the threshold for eligibility for overtime pay to more than twice the current rate, moving the cut-off to $47,476, up from the current $23,660.