The Independent Insurance Agents & Brokers of America, Inc., alongside the U.S. Chamber of Commerce and more than 50 different business groups, filed a suit on Tuesday against the White House’s efforts to expand overtime pay to workers across the country.
The new regulations raise the overtime eligibility threshold to $47,476 a year from $23,660 a year. Administration officials have estimated that the change could benefit more than 4 million Americans, while businesses and other officials have argued the regulations will force employers to demote salaried workers to hourly positions.
The “misguided overtime rule will negatively impact independent insurance agencies and their employees,” says Bob Rusbuldt, president and CEO of the Big 'I'.
“The lawsuit takes aim at the arbitrary and excessive 100% increase in the monetary threshold required to be exempt from overtime, as well as the mechanism for automatically updating the threshold,” adds Charles Symington, Big 'I' senior vice president of external and government affairs. “The Big ‘I’ is the only insurance trade association to join the lawsuit. We believe this lawsuit is a necessary step to help protect our members, many of which are small businesses, against unreasonable regulatory overreach by the Department of Labor.”
But the lawsuit from business groups wasn’t the only one filed Tuesday. Texas’ Attorney General Ken Paxton, along with 21 states, also filed a second lawsuit against DOL.
“Once again, President Obama is trying to unilaterally rewrite the law,” Paxton said Tuesday. “And this time, it may lead to disastrous consequences for our economy. The numerous crippling federal regulations that the Obama administration has imposed on businesses in this country have been bad enough. But to pass a rule like this, all in service of a radical leftist political agenda, is inexcusable.”
Joining Texas and Nevada in the lawsuit are Alabama, Arizona, Arkansas, Georgia, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Michigan, Mississippi, Nebraska, New Mexico, Ohio, Oklahoma, South Carolina, Utah and Wisconsin.
The DOL, however, defended its rule in wake of the lawsuits.
“We are confident in the legality of all aspects of our final overtime rule,” U.S. Labor Secretary Thomas E. Perez said in a statement. “It is the result of a comprehensive, inclusive rule-making process. Despite the sound legal and policy footing on which the rule is constructed, the same interests that have stood in the way of middle-class Americans getting paid when they work extra are continuing their obstructionist tactics.”
“Partisan lawsuits filed today by 21 states and the U.S. Chamber of Commerce seek to prevent the Obama administration from making sure a long day’s work is rewarded with fair pay,” Perez added. “The overtime rule is designed to restore the intent of the Fair Labor Standards Act, the crown jewel of worker protections in the United States.”
Over the years, DOL notes, the crown jewel has lost its luster: In 1975, 62% of full-time salaried workers had overtime protections based on their pay; today, just 7% have those protections.
“I look forward to vigorously defending our efforts to give more hardworking people a meaningful chance to get by,” Perez added.
