The National Federation of Independent Business, alongside the U.S. Chamber of Commerce and more than 50 different business groups, filed a suit on Tuesday against the White House’s efforts to expand overtime pay to workers across the country.
“In many cases, small businesses must reorganize their workforces and implement new systems for tracking hours, recordkeeping and reporting,” said NFIB President and CEO Juanita Duggan. “They can’t just flip a switch and be in compliance,” she said of the new rules set to take effect Dec. 1.
The new regulations raise the overtime eligibility threshold to $47,476 a year from $23,660 a year. Administration officials have estimated that the change could benefit more than 4 million Americans, while businesses and other officials have argued the regulations will force employers to demote salaried workers to hourly positions.
“The Obama administration continuously proves that it doesn’t care about the small business sector and the problems that they are facing,” added Karen Harned, NFIB’s small business legal center executive director. “This administration has repeatedly used its executive power to implement new rules and regulations on the small business community without considering the economic effects as the law requires.”
But the lawsuit from business groups wasn’t the only one filed Tuesday. Texas’ Attorney General Ken Paxton, along with 21 states, also filed a second lawsuit against DOL.
“Once again, President Obama is trying to unilaterally rewrite the law,” Paxton said Tuesday. “And this time, it may lead to disastrous consequences for our economy. The numerous crippling federal regulations that the Obama administration has imposed on businesses in this country have been bad enough. But to pass a rule like this, all in service of a radical leftist political agenda, is inexcusable.”
Joining Texas and Nevada in the lawsuit are Alabama, Arizona, Arkansas, Georgia, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Michigan, Mississippi, Nebraska, New Mexico, Ohio, Oklahoma, South Carolina, Utah and Wisconsin.
The DOL, however, defended its rule in wake of the lawsuits.
“We are confident in the legality of all aspects of our final overtime rule,” U.S. Labor Secretary Thomas E. Perez said in a statement. “It is the result of a comprehensive, inclusive rule-making process. Despite the sound legal and policy footing on which the rule is constructed, the same interests that have stood in the way of middle-class Americans getting paid when they work extra are continuing their obstructionist tactics.”
“Partisan lawsuits filed today by 21 states and the U.S. Chamber of Commerce seek to prevent the Obama administration from making sure a long day’s work is rewarded with fair pay,” Perez added. “The overtime rule is designed to restore the intent of the Fair Labor Standards Act, the crown jewel of worker protections in the United States.”
Over the years, DOL notes, the crown jewel has lost its luster: In 1975, 62% of full-time salaried workers had overtime protections based on their pay; today, just 7% have those protections.
“I look forward to vigorously defending our efforts to give more hardworking people a meaningful chance to get by,” Perez added.
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