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NAM, Partners to DOL: Stay Overtime Rule

The Labor Department should put its finalized overtime rule on hold pending judicial review, the NAM and 95 partner organizations urged this month.

What’s going on: In April, the DOL promulgated a regulation that would make approximately 4 million additional workers in the U.S. eligible for overtime pay. It is set to go into effect July 1.

  • Under the finalized rule, starting in 2025 most employees making less than $58,656 a year will be owed time-and-a-half wages when they work more than 40 hours in any single workweek (Bloomberg Law, subscription).
  • The current threshold is around $35,500 a year.
  • Earlier this month, Texas filed suit to block the rule on the grounds that it violates federal wage law.

A commonsense pause: A stay “while litigation is pending ensures that impacted businesses and the agency itself do not waste valuable resources by attempting to come into compliance or implement a rule that could be invalidated by a court,” the groups told Labor Department Wage and Hour Division Administrator Jessica Looman.

  • “A delay would be a minor change for the Wage and Hour Division, while it could protect many businesses and workers from detrimental consequences,” they added, pointing out that during the Obama administration, a legal challenge to a final overtime rule resulted in the rule being struck down just a week before its effective date.
  • By that time, employers had incurred employee-related costs they could not recover.

Why the rule’s flawed: “[I]f the overtime rule is implemented, it will trigger significant costs for the employer community,” the groups went on.

  • It will also constrain employers, slash “flexibility for workers who will be reclassified and may force companies to make painful choices that limit both job creation and growth opportunities available to employees,” NAM Managing Vice President of Policy Chris Netram said in April.
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