DOL overtime expansion ‘unlawful,’ business groups argue

Dive Brief:

The U.S. Department of Labor’s overtime rule update is unlawful several business groups, including the National Retail Federation, told a federal court on May 22, asking a judge to block the regulation just weeks before its effective date.
The plaintiffs claim in a lawsuit the rule expansion violates the Fair Labor Standards Act as well as the Administrative Procedure Act.
The updated overtime rule requires that workers who make less than $58,656 annually receive overtime pay and allows for automatic increases.

Dive Insight:

The plaintiffs in this case — including the National Retail Federation, the American Hotel and Lodging Association, the Associated Builders and Contractors, the National Association of Convenience Stores, the National Association of Home Builders, the Plano Chamber of Commerce and the Restaurant Law Center — maintain that the changes proposed by DOL ignore legal precedent and the needs of corporate America.

Per the filing, DOL’s “new salary threshold is so high that it is no longer a plausible proxy for delimiting which jobs” count as executive, administrative or professional jobs.

The group filed the lawsuit in the U.S. District Court for the Eastern District of Texas — the same court that blocked a previous overtime rule from the Obama administration in 2017. “Plaintiffs are back before this Court because the Department has done it again,” they said.

The challenge is just the latest the Biden administration is facing as it works to promulgate a number of employment regulations and guidances during an election year. DOL is already defending a recently updated independent contractor rule.

The U.S. Equal Employment Opportunity Commission is likewise facing legal challenges. Alongside 17 other states, Tennessee earlier this month challenged EEOC guidance on gender identity. In that instance, plaintiffs argued that the EEOC misinterpreted the Supreme Court’s Bostock v. Clayton County decision. Likewise, Tennessee is also leading the charge on challenging the EEOC’s pregnancy accommodation guidance