The suit states that, by setting an excessively high salary threshold for determining who qualifies as “executive, administrative and professional employees”, the rule departs from the intent established by Congress in the Fair Labor Standards Act.
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Raise the salary threshold indicating eligibility from $455/week to $913 ($47,476 per year), ensuring protections to 4.2 million workers (including an estimated 370,000 in Texas).
Another portion Paxton is challenging: the rule says the salary level will increase every three years automatically without going through any court or government process.
The impact for businesses and state and local governments is a substantial increase in their employment costs, which may force them to eliminate some services and even layoff employees.
“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.
“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.
“The department has issued a final rule that will put more money in the pockets of middle class workers – or give them more free time”, the department says on its website.
U.S. Secretary of Labor Thomas E. Perez said in a written statement that he is confident of the legality of the rule, describing the lawsuits as partisan.
The Cedar Park Chamber of Commerce has joined a lawsuit to block the U.S. Department of Labor’s new federal overtime regulations.
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.
The White House announced in May the new rules to take effect Dec 1.
The complaint also contends that the new rules, which are scheduled to go into effect December 1, will substantially increase labor costs for many states, local governments and private businesses, and will likely result in layoffs and job elimination.
The other states involved in the lawsuit are Alabama, Arizona, Arkansas, Georgia, Indiana, Iowa, Kansas, Louisiana, Maine, Michigan, Mississippi, Nebraska, New Mexico, Nevada, Ohio, Oklahoma, South Carolina, Texas, Utah and Wisconsin. The outcome of this rule could very well have the opposite effect, as business owners scramble to reduce pay and overtime hours.
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The lawsuit claims the rule is unconstitutional, violates federal rule-making procedures, and exceeds Congressional authorization.
