More than 55 business groups sue over overtime rule

More than 55 business groups sue over overtime rule
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More than 55 Texas and national business groups filed a lawsuit against the Labor Department on Tuesday, challenging the constitutionality of its overtime rule.

The U.S. Chamber of Commerce, which is leading the suit, claims the agency went too far when it finalized a rule in May making anyone earning up to $47,476 a year, or roughly $913 a week, eligible for overtime pay.

The cutoff for overtime pay previously stood at $23,660 per year.

In the suit, the groups claim the salary threshold is so high that salaried executive, administrative, professional and computer employees, whom Congress meant to keep exempt, now qualify.

The groups also argue that the rule violates the Fair Labor Standard’s Act (FLSA) and exceeds the agency’s authority by establishing an “unprecedented ‘escalator’ provision that will dramatically increase the minimum salary over time.”

“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],” the complaint said.

The National Association of Manufacturers (NAM), which joined the suit, said in a statement Tuesday that the rule will force employers to cut critical programs, staff and services.

“Over the past year, manufacturers have been facing a deluge of regulations, often proposed with razor-thin or nonexistent legal authority,” NAM’s Vice President and General Counsel Linda Kelly said.

“For manufacturing in the United States to be successful, policymakers cannot continue to pile on additional legally dubious regulations.”

Nevada and 20 other states also announced Tuesday they will challenge the overtime rules, according to the Las Vegas Review-Journal. 

Their lawsuit argues the rule is unconstitutional because it dictates wages states must pay employees for government functions, and say the change would upset the state budgeting process by requiring states to pay overtime to more employees. 

In a statement Tuesday, Labor Secretary Tom Perez called the lawsuits “partisan” attempts to “prevent the Obama administration from making sure a long day’s work is rewarded with fair pay.”

“We are confident in the legality of all aspects of our final overtime rule. It is the result of a comprehensive, inclusive rule-making process,” he said.  “Despite the sound legal and policy footing on which the rule is constructed, the same interests that have stood in the way of middle-class Americans getting paid when they work extra are continuing their obstructionist tactics.”

Perez went on to say that the department looks forward to “vigorously defending our efforts to give more hardworking people a meaningful chance to get by.”

(This story was updated Wednesday at 11:04 a.m. to include the statement from Perez.)