The Greater Tomball Area Chamber of Commerce joined more than 50 Texas business organizations in taking legal action, announced Tuesday, against a new Department of Labor overtime rule, which goes into effect Dec. 1.
"Our board voted unanimously to do this," GTACC President Bruce Hillegiest said. "We're here to be an advocate for businesses and we're a voice for businesses. Small businesses are the backbone of our economy and this will create a harmful environment for them to do business in."
More than 50 Texas and national business organizations, led by the U.S. Chamber of Commerce, National Association of Manufacturers and the Texas Association of Business, filed a lawsuit in U.S. District Court that alleges a new overtime rule will negatively impact businesses. The legal challenge alleges the federal government “went too far in the new overtime regulation.”
“We have heard from our members, small businesses, nonprofits, and other employers that the salary threshold is going to result in significant new labor costs and cause many disruptions in how work gets done,” said Randy Johnson, U.S. Chamber vice president of labor, immigration and employee benefits, in a statement. “The new overtime rule will result in salaried professional employees being converted to hourly wages, and it will reduce workplace flexibility, remote electronic access to work, and opportunities for career advancement."
The overtime pay rule changes the salary threshold for those who are exempt from receiving mandatory overtime pay. Currently, full-time, salaried workers making $23,660 or more per year do not qualify for overtime pay. Under the rule, that salary level changes to $47,476 or more per year in 2016.
The DOL said about 4.6 million employees who are currently exempt from overtime pay would receive overtime protection under the rule, which the department argues would help those workers receive fair compensation for their work.
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. The lawsuit was filed in the U.S. District Court for the Eastern District of Texas.
The state of Texas today also announced its own federal lawsuit against the pending overtime rule change, joining a coalition of 21 states. Attorney General Ken Paxton said in a statement the new law would “lead to disastrous consequences for our economy.”
Paxton and the business coalition also took issue with changes that would automatically increase salary thresholds every three years for the new overtime rule.
U.S. Secretary of Labor Thomas Perez said in a statement Tuesday he expects the overtime rule to withstand legal scrutiny, dismissing the lawsuits as a partisan attempt to undermine the Obama administration's labor policies. "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," Perez said in the statement. The overtime rule was intended to "restore the intent" of the Fair Labor Standards Act, Perez said. The effects of the law's overtime protections have eroded over time, he said.