21 states, business groups, file suit against new Obama overtime rules

The Chamber of Commerce, as well as other business groups, and 21 states have filed separate suits in federal court looking to block President Obama's new overtime rules that are scheduled to go into effect December 1.

The overtime rules double the threshold that employers must pay overtime to salaried employees, from $23,660 to $47,500. 

A study by the National Association of Manufacturers noted that the new rules will cost businesses more than $81 billion over 10 years.  They may also force companies to slash the number of salaried employees and create more part-time positions.


“Once again, President Obama is trying to unilaterally rewrite the law,” Texas Attorney General Ken Paxton said in a statement. “And this time, it may lead to disastrous consequences for our economy.”

Paxton and Nevada Attorney General Adam Laxalt spearheaded the states’ lawsuit, which was joined by Michigan, Wisconsin and Ohio, among others.

U.S. Labor Secretary Thomas Perez said in a statement the rule had “sound legal and policy footing” and the lawsuits were an attempt to deprive workers of fair pay. Only 7% of full-time salaried employees are currently eligible for overtime pay, he said, down from 62% in 1975.

“I look forward to vigorously defending our efforts to give more hardworking people a meaningful chance to get by,” Perez said.

Both of Tuesday’s lawsuits said the department abused its authority by increasing the salary threshold so drastically, and also failed to account for regional variations in the cost of living.

The agency also violated federal law by indexing the salary threshold to the 40th percentile of income, with automatic increases every three years, the lawsuits claim.

The states’ lawsuit says that under the rule many state employees would become eligible for overtime pay even though they perform management duties that should make them exempt.

That would force states to pay workers more or resort to layoffs and other budget cuts, a violation of states’ rights, they said.

It should be obvious to anyone by now that the president talks a good game when it comes to job creation, but his actions ultimately destroy jobs.  The president seems willing to accept European levels of unemployment 10% or more just as long as those who are working are beholden to Democrats for their wages. 

If all of those too discouraged to find work, and those working part-time who want to work full-time, were to be counted as "unemployed," the true rate  (U-6 measurement by BLS) of joblessness would approach 10%.  There is little doubt that these rules, as well as other "midnight regulations" that will be implemented by the Obama administration, will drive that number upward. 

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