A.B.A. joins lawsuit against overtime rule

by Jeff Gelski
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Overtime law
The overtime rule doubles the current exemption threshold and limits workplace flexibility in the baking industry, according to the A.B.A.

WASHINGTON — The American Bakers Association belongs to a coalition of business groups, including the U.S. Chamber of Commerce, that has filed a lawsuit against the U.S. Department of Labor’s new overtime rule scheduled to take effect Dec. 1. The rule raises the salary threshold indicating eligibility to $913 per week, or $47,476 per year, from $455 per week, and it strengthens overtime protection for salaried workers already entitled to overtime, according to the Department of Labor. The new rule will double the current exemption threshold and give little time for bakers to implement the new standard, according to the Washington-based A.B.A.

Robb MacKie, ABA
Robb MacKie, president and c.e.o. of the A.B.A. 

“This regulation severely limits workplace flexibility in the baking industry, adds uncertainty and dramatically increases red tape,” said Robb MacKie, president and chief executive officer of the A.B.A. “Time and resources that would otherwise be spent on creating jobs and expanding business opportunities will now be used to comply with this new rule.”

The final rule pertains to the Fair Labor Standards Act that guarantees a minimum wage for all hours worked and limits to 40 hours per week the number of hours an employee can work without additional compensation. For another aspect of the new rule, it calls for automatically updating the salary threshold every three years based on wage growth over time. The rule was published in the May 23 issue of the Federal Register and may be viewed here.

The lawsuit against the rule was filed Sept. 20 in the U.S. District Court for the Eastern District of Texas, Sherman Division. Besides the A.B.A. and the U.S. Chamber of Commerce, the coalition filing the lawsuit included such business groups as the National Automobile Dealers Association, the National Association of Manufacturers, the National Association of Wholesale-Distributors, and more than 50 other national and Texas business groups.

Randel K. Johnson, Senior Vice President, Labor, Immigration, and Employee Benefits for the U.S. Chamber of Commerce
Randy Johnson, senior vice-president of Labor, Immigration, and Employee Benefits for the U.S. Chamber of Commerce

“The D.O.L. went too far in the new overtime regulation,” said Randy Johnson, senior vice-president of Labor, Immigration, and Employee Benefits for the Washington-based U.S. Chamber of Commerce. “We have heard from our members, small businesses, non-profits and other employers that the salary threshold is going to result in significant new labor costs and cause many disruptions in how work gets done.

“Furthermore, the automatic escalator provision means that employers will have to go through their reclassification analysis every three years. In combination, the new overtime rule will result in salaried professional employees being converted to hourly wages, and it will reduce workplace flexibility, remote electronic access to work and opportunities for career advancement.”

More on the lawsuit may be found here.

Thomas E. Perez, U.S. Secretary of Labor
Thomas E. Perez, U.S. Secretary of Labor

“We are confident in the legality of all aspects of our final overtime rule,” said Thomas E. Perez, U.S. Secretary of Labor. “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.”

A day after the lawsuit was filed U.S. Representative Tim Walberg of Michigan introduced the Regulatory Relief for Small Businesses, Schools, and Nonprofits Act (H.R. 6094). The bill requires a six-month delay for the current Dec. 1 effective date for the new overtime rule.

U.S. Representative Tim Walberg of Michigan
U.S. Representative Tim Walberg of Michigan

“Small businesses, non-profits, and colleges and universities nationwide have urged the administration to take a more responsible approach to updating our nation’s overtime rules,” Mr. Walberg said. “There is agreement that federal overtime rules need to be updated, and we’ve been working in a bipartisan fashion to find a reasonable consensus to modernize these rules.

“Unfortunately, the administration has refused to listen, and too many hard working people impacted by the rule are now struggling to prepare for drastic changes in just a few short months. The administration should go back to the drawing board altogether, but at the very least, it should work with us to delay the rule and provide much needed relief.”

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