Overtime Rule Faces Legal Challenge

More than a dozen business and industry groups have filed a lawsuit in the Eastern District of Texas asking a federal court to nullify the Biden Administration’s final overtime rule . The lawsuit argues that the Department of Labor’s overtime rule goes beyond its authority under the Fair Labor Standards Act and the Administrative Procedures Act.

The business coalition asked the court to provide expedited consideration of the case given that the first salary adjustment goes into effect on July 1.

The suit argues DOL “failed to adequately justify the dramatic change in policy embodied in the rule, failed to take into account the strong reliance interest of the regulated community, and failed to meaningfully consider reasonable alternatives.”

While the outcome of the litigation and the possibility of an injunction are unclear at this point, the suit was filed in the same district that threw out the Obama Administration’s rule in 2016. At the time, the court found that the DOL rule focused too heavily on salary levels and eliminated consideration of job duties. The current lawsuit argues that the new rule ignores that precedent.

The automatic 3-year salary threshold adjustments included in the Biden Administration’s rule are also being challenged. The suit argues that automatic updates violate the Administrative Procedures Act, which requires notice and comment periods as a mandatory part of administrative rulemaking.

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Karin Johns