Official White House Photo by Pete Souza – Creative Commons 3.0
On Tuesday, state officials from 21 states and 55 business associations challenged the overtime rule announced by the Obama Administration.
The lawsuit was filed against the US Department of Labor in the US District Court of Eastern Texas. The complaint filed by the 55 business associations claims that the proposed overtime rule violates the Fair Labor Standards Act (FLSA). The overtime rule will allow any workers that earns less than $47,476 a year (about $913 a week) to be eligible for overtime, which is nearly double the current rate of $23,660 a year. The complaint states that this rapid increase in the overtime pay threshold establishes an “unprecedented ‘escalator’ provision that will dramatically increase the minimal salary overtime.” Furthermore, the groups argue that the new threshold qualifies executive, administrative, professional and computer employees that Congress intended to keep exempt.
The complaint stated, “This provision not only departs from the terms of the FLSA, it does so without additional notice and comment required by the [Administrative Procedures Act],” according to The Hill. One member of the groups which filed the claim, the National Association of Manufacturers (NAM), argue that such a rule may force employers to fire workers or remove other company programs and services.
NAM Vice President and General Counsel, Linda Kelly, stated “For manufacturing in the United States to be successful, policymakers cannot continue to pile on additional legally dubious regulations.”
Claim Filed by the States
The 21 states that sued the Department of Labor claim that Obama’s overtime rule is unconstitutional because it will require the states to pay an exuberant amount of overtime pay for for federal functions, and provide complications to their budgeting process.
Nevada Attorney General, Adam Laxalt, stated “This rule, pushed by distant bureaucrats in D.C., tramples on state and local government budgets, forcing states to shift money from other important programs to balance their budgets, including programs intended to protect the very families that perpetually benefit from such federal overreach.”
President of the Las Vegas Metro Chamber of Commerce, Kristin McMillan, stated “We believe that many employers across our state and country — large and small alike — will not be able to meet the high cost of these ongoing rate changes, and as a result, will be forced to curtail hiring or even lay off employees.”
States filing the claim against the Department of Labor include:
- Alabama
- Arizona
- Arkansas
- Georgia
- Indiana
- Kansas
- Kentucky
- Louisiana
- Michigan
- Mississippi
- Nebraska
- Ohio
- Oklahoma
- South Carolina
- Texas
- Utah
- Wisconsin
- Iowa
- Maine
- New Mexico
- Nevada
Department of Labor Holds its Ground
Department of Labor Secretary, Tom Perez, stated on Tuesday “We are confident in the legality of all aspects of our final overtime rule. It is the result of a comprehensive, inclusive rulemaking process.” he went further to say, “The overtime rule is designed to restore the intent of Fair Labor Standards Act, the crown jewel of worker protections in the United States.”
Perez also noted that federal overtime rules have dwindled in their overall protection of workers’ right to fair pay since 1975 when overtime regulations protected 62 percent of full time workers. Overtime rules currently only cover seven percent of American workers.
When the Obama Administration’s overtime rule was announced in May, lawmakers stated “This long-awaited update will result in a meaningful boost to many workers’ wallets, and will go a long way toward realizing President Obama’s commitment to ensuring every worker is compensated fairly to their hard work.”
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