Texas is helping lead a lawsuit against President Barack Obama’s administration over a new rule that makes millions more workers eligible for overtime pay.
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The new rule will essentially double the threshold for overtime eligibility to a salary of nearly $47,500 per year.
Attorney General Ken Paxton announced Tuesday he is joining his counterpart in Nevada, Adam Laxalt, to file the lawsuit on behalf of 21 states.
On May 18, 2016, the U.S. Department of Labor (DOL) issued a final rule to update the regulations governing which employees are eligible for overtime pay. He noted that overtime protections have receded over the years: they applied to 62 percent of full-time salaried workers in 1975 and just 7 percent today. The states also decry the automatic indexing provision that would increase the salary threshold every three years, contending that future increases should be subject to notice and comment.
The complaint urges a federal court to prevent the implementation of the new rule before it takes effect – which is scheduled for December 1, 2016.
The lawsuit by the states argues the change would burden the private and public sectors by putting a strain on budgets and forcing employers to lay off workers or cut back on their hours.
“The Labor Department’s extreme and reckless changes to the overtime rules will hobble the career paths of millions of Americans trying to climb the professional ladder”, said NRF senior VP for government relations David French.
Randy Johnson, U.S. Chamber vice president of labor, immigration and employee benefits, said in a statement that the policy would result in significant new labor costs and cause “disruptions” in the labor market.
Over 20 states, including Kansas, have now filed suit to challenge revisions to the Fair Labor Standards Act. “Many employers will lose the ability to effectively and flexibly manage their workforces upon losing the exemption for frontline executives, administrators, and professionals”.
A spokesman for the U.S. Small Business Administration’s Wisconsin district office said the agency could not comment on the lawsuit.
ASAE does not oppose an adjustment to the current overtime threshold but has expressed concern that the new rule as written would adversely affect nonprofit organizations and other employers with limited revenues and could harm affected employees as well.
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In addition to OH and Nevada, other plaintiffs include Alabama, Arizona, Arkansas, Georgia, Indiana, Kansas, Kentucky, Louisiana, Michigan, Mississippi, Nebraska, Oklahoma, South Carolina, Texas, Utah and Wisconsin, as well as the governors of Iowa, Maine and New Mexico.
