Wisconsin and 20 other states are suing the federal government over new rules that will make many more white-collar workers eligible for overtime.
Advertisement
The U.S. Chamber of Commerce and the National Retail Federation both expressed displeasure with the rule, arguing that businesses will be unable to afford the increased labor costs and timekeeping systems associated with the new regulation.
The lawsuit urges the court to prevent the implementation of the rule before it takes effect, which is scheduled for December 1, 2016. The final rule, approved in May by the Labor Department, would make any salaried employee making less than $47,500 a year eligible for overtime, to be paid at time-and-a-half. The new rule would allow the salary threshold to increase every three years in step with average increases in wage growth.
According to the Department of Labor, the new salary level is set at the 40th percentile of earnings of full-time salaried workers in the lowest-wage Census region, now the South.
“The Department of Labor … is forcing state, local and private employers to pay overtime to any employee who earns under a certain amount, regardless of whether that employee is actually performing “executive, administrative, or professional” duties”, he continued.
It would more than double the salary threshold under which employers must pay overtime to their white collar workers.
“The result of this unfunded mandate by the federal government would be to force many private sector employers to lay off workers”, said Bevin.
Twenty-one states filed a lawsuit Tuesday against the federal government seeking to overturn a sweeping regulation created to qualify millions of Americans for overtime pay starting in December, a step the Obama administration considers one of its signature workplace achievements. Only 7 percent of full-time salaried employees are now eligible for overtime pay, he said, down from 62 percent in 1975.
The states and business groups in Tuesday’s lawsuits said the department abused its authority by increasing the threshold so drastically, and also failed to account for regional variations in the cost of living.
The states are seeking an injunction to prevent the new rules from going into effect.
Advertisement
Plaintiffs in Tuesday’s lawsuit include the states of Texas, Nevada, Michigan, Wisconsin, Georgia and OH, among others.
