More than a dozen businesses and industry lobbying groups have come together to challenge a new US Labor Department rule that aims to extend overtime pay coverage to approximately 4 million workers. The lawsuit was filed in the Eastern District of Texas on Wednesday, contending that the regulation which limits exemptions to overtime pay requirements is an overreach of authority under the Fair Labor Standards Act and a violation of the Administrative Procedure Act.
The group argues that the Department has not provided sufficient justification for the significant policy shift reflected in the Rule. They also claim that the Department did not consider the substantial reliance interests of businesses and industries that would be affected by the regulation. By narrowing the exemption to overtime pay requirements, the Rule would have a significant impact on businesses and their ability to manage costs.
The businesses and industry groups are seeking to have the new rule overturned by the federal court. They believe that the Department’s actions in implementing the regulation were arbitrary and capricious, and that it will have negative consequences for both employers and employees. The outcome of this lawsuit could have far-reaching implications for millions of workers who may be affected by the expanded overtime pay protections.