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Local businesses react after judge blocks new overtime law

INDIANA-- A federal judge’s decision is rattling businesses across central Indiana.

Last night in Texas, a judge temporarily blocked new overtime regulations set to go into effect next week. His decision came in response to a lawsuit filed by 21 states, including Indiana.

Many companies have spent months preparing for the new overtime rules. Now they’re trying to figure out how to move forward without hurting their employees.

“It was a big surprise,” said Meghann Isgan, an HR manager for One Click Ventures in Greenwood. “I thought that this close to the deadline, we were pretty much safe to move forward, but that didn’t turn out to be the case.”

Last week we showed you how she was preparing the small business for the new OT laws, which would have forced companies to pay overtime to any employee making less than $47,500 a year.

“We had put a lot of work into getting prepared and at this point we were completely ready for those changes to take place next week on December 1, so really it’s just backtracking at this point,” said Isgan.

But those changes, won’t be happening at least not next week.

Tilson HR, is now helping deal with the fallout.

“We’ve been on the phone all morning with clients across the country, helping them,” said Brent Tilson, Tilson’s CEO.

Thinking the change was inevitable, some companies already told their employees their pay was going up. Others already increased prices for customers in anticipation of salary raises.

“Now they have to make decisions,” said Tilson.  “Do they go back and roll back because this happened, do they need to tell their clients who they advised, “Hey we’re raising prices because of these rules”? Do they need to go back and say now prices aren’t going up?”

The uncertainty, Brent Tilson says, is magnified because of President-elect Donald Trump’s win.

“With the change in administration, it certainly does make this a situation that is more likely to be stopped and not enforced or rolled back if you will, but it’s really hard to say,” said Tilson.

In the meantime, people like Igsan, will have to wait.

I hope that it comes quickly just so that we have an answer one way or the other as to how things are going to shake out,” said Igsan.

Indiana’s Office of the Attorney General issued a statement applauding the judge’s decision, saying, “This rule would be a direct challenge to our system of federalism by allowing unelected federal bureaucrats tell Indiana and other sovereign states how much to pay our own public servants without Congressional authority.”

According to Tilson, the Department of Labor can, and likely will appeal the judge’s decision soon.

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