ABC and a coalition of business groups filed suit against the U.S. Department of Labor (DOL) Wage and Hour Division’s costly and burdensome final overtime rule on Sept. 20. 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.