State suing over new overtime rule

Wisconsin is among a coalition of 21 states suing the U.S. Department of Labor over a new rule that would make more higher-earning workers eligible for overtime pay.

The rule, set to go into effect December 1, doubles the salary threshold under which workers qualify for overtime pay, from $455 per week to $913 per week.

The Department of Labor began looking at revising the Fair Labor Standards Act’s overtime exemption for executive, administrative, and professional employees in 2014.

Under current law, those who earn more than $23,660 a year, or $455 a week, and perform some managerial duties can be paid as salaried workers and not receive extra pay when they work more than 40 hours a week through what’s known as the “White Collar Exemption”.

The Cedar Park Chamber of Commerce has joined a lawsuit to block the U.S. Department of Labor’s new federal overtime regulations.

But 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.

“This rule, pushed by distant bureaucrats in D.C., tramples on state and local government budgets, forcing states to shift money from other important programs to balance their budgets, including programs meant to protect the very families that purportedly benefit from such federal overreach”, Laxalt said in a statement. Among other theories, the lawsuit alleges that the DOL enacted the new rule in violation of states’ rights, that the DOL exceeded its statutory authority in enacting the rule and that the rule’s indexing provision violates the Federal Administrative Procedures Act. On Tuesday, Paxton warned the rule “may lead to disastrous consequences for our economy”. “It will have immediate and long-term ramifications on our business climate not only because of the doubling of the salary threshold, but because of the automatic updates to the salary threshold that will occur every three years”. The Department of Labor’s new “overtime rule” is at the center of the latest suit. That’s why the Chamber made a decision to join the fight against the new regulations. Paxton says the rule will more than double the salary threshold for a worker to be entitled to overtime and increase the costs of local governments and private businesses – which in turn could force them to lay off a large number of workers.

Obama and others sought to update the rules – last changed in 2004 – to boost store managers, office supervisors and other middle-income, white-collar Americans. “Once again, the Obama administration is attempting to require compliance with non-legally binding edicts that should instead be decided at the state and local level”.

In 1975, for example, an estimated 62 percent of full-time salaried workers had overtime protections based on pay, he said.