A coalition of U.S. business groups has taken legal action to prevent a Biden administration rule from going into effect that would expand mandatory overtime pay to 4 million workers. The groups filed a lawsuit in federal court in Sherman, Texas, arguing that the U.S. Department of Labor did not have the authority to implement the rule and that it would result in job cuts and reduced hours for workers.
The proposed rule would require employers to pay overtime premiums to workers who earn less than $58,600 per year when they work more than 40 hours in a week. This threshold is higher than the current one of around $35,500 per year, which was established by the Trump administration in 2020. Advocacy groups and many Democrats have criticized this threshold as inadequate.
The business groups behind the lawsuit argue that complying with the new rule would lead to many smaller employers and non-profits with fixed budgets having to make cuts to critical programs, staffing, and services. They believe that the rule would place an undue burden on businesses, especially those with limited financial resources.
The Department of Labor did not offer a comment on the lawsuit. The agency has defended the rule by highlighting that lower-paid salaried workers often perform the same tasks as hourly employees but work longer hours without extra pay. The groups involved in the lawsuit include the National Federation of Independent Business, the International Franchise Association, and the National Retail Federation.
Under
