WASHINGTON, D.C. – Associated Builders and Contractors (ABC) and a coalition of business groups today filed suit against the U.S. Department of Labor (DOL) Wage and Hour Division’s costly and burdensome final overtime rule. The legal challenge was filed in the U.S. District Court for the Eastern District of Texas.
“The Department of Labor overstepped its statutory authority by dramatically increasing the minimum salary for exempt employees and by automatically updating the salary threshold,” said ABC Vice President of Legislative and Political Affairs Kristen Swearingen. “The unprecedented automatic indexing provision circumvents the intent of Congress under the Fair Labor Standards Act and is particularly problematic for construction business owners who often need to project costs and workforce needs over multiple years for projects managed by exempt employees.
“These projects often last longer than three years and are meticulously planned in order to stay on time and budget,” said Swearingen. “This rule will create uncertainty for contractors and their employees by forcing contractors to speculate about employees’ status years into the future when work on a project will actually be performed.”
DOL released its final overtime rule on May 18. The final rule drastically alters DOL’s minimum salary requirements (increasing the minimum by 100 percent) and will impose overtime payment requirements on employers of more than 4.2 million employees who are classified as executive, administrative, professional and computer professional employees and have historically been considered to be exempt from overtime.
ABC has been a vocal opponent of the overtime rule and submitted comments along with more than 900 ABC members opposing the rule. ABC supported legislation that would prevent DOL from implementing the rule and submitted comments as a member of the Partnership to Protect Workplace Opportunity as well.
UPDATE: US Labor Secretary Thomas E. Perez’s statement on the filing of lawsuits challenging the department’s update to overtime rules
U.S. Secretary of Labor Thomas E. Perez issued the following statement on the filing of lawsuits by a group of states, the U.S. Chamber of Commerce and other organizations in the Eastern District of Texas challenging the update to the Fair Labor Standards Act’s overtime rules for white-collar, salaried workers:
“We are confident in the legality of all aspects of our final overtime rule. 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. 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. The crown jewel has lost its luster over the years: in 1975, 62 percent of full time salaried workers had overtime protections based on their pay; today, just 7 percent have those protections – meaning that too few people are getting the overtime that the Fair Labor Standards Act intended. I look forward to vigorously defending our efforts to give more hardworking people a meaningful chance to get by.”