The Lake Houston Area Chamber of Commerce has joined more than 50 Texas business organizations in filing a lawsuit against a new Department of Labor overtime rule, which goes into effect December 1. The new overtime rule contains a provision to automatically increase the threshold every three years without going through the standard rule-making process.
Advertisement
“This new Obama administration rule is another example of the federal government’s never-ending attempt to encroach upon the rights of individual states”, Bevin said in the news release.
Gov. Paul LePage has signed on to a legal complaint by 21 states against new overtime rules proposed by the U.S. Department of Labor.
But that threshold will almost double under the new rule, and workers making up to $47,476 a year will be eligible for overtime after 40 hours of work in a week.
Iowa has joined 20 other states in an effort to resist new overtime regulations handed down by President Barack Obama’s Labor Department.
The lawsuit specifically claims that the rule is too broad because it is based on the salary threshold.
The rule is expected to have broad effect on employers, workers and sectors including fast-food, retail, colleges and nonprofits.
The complaint states this rule would drive employment costs substantially and could force elimination of serves or cause layoffs. On Tuesday, Paxton warned the rule “may lead to disastrous consequences for our economy”.
He said the federal government “is forcing state, local and private employers to pay overtime to any employee who earns under a certain amount”.
The U.S. Labor Department started finalizing the rule in May, saying that it would put more money into the hands of the middle class, or give them more free time.
Hours after the states announced their lawsuit, the U.S. Chamber of Commerce and other business groups filed a separate challenge to the rule in the same federal court in Sherman, Texas.
Advertisement
Plaintiffs in Tuesday’s lawsuit include the states of Texas, Nevada, Michigan, Wisconsin, Georgia and OH, among others. Previously, the Fair Labor Standards Act of 1938 guaranteed that anyone making a salary of $23,660 or less annually was entitled to overtime pay (at 1.5x time) for any hours beyond the 40-hour workweek.
