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State suing over new overtime rule (UPDATE)

Wisconsin and 20 other states are suing the federal government over new rules that will make many more white-collar workers eligible for overtime.

The Wisconsin Department of Justice announced Tuesday that it has joined a lawsuit contending that the new rule will virtually eliminate an exception that now prevents many white-collar workers from receiving overtime. Executive, administrative and professional employees are largely exempted now.

The Wisconsin DOJ alleges the new rule would replace those exemptions with a pay threshold that essentially requires overtime for anyone making less than $47,476 a year. The limit had previously been set at $23,660.

The DOJ also notes the new rule contains a mechanism that will cause that pay threshold to be revised automatically every three years to track changes in general wages. Department of Labor officials estimate the new overtime protections will cover an additional 4.2 million U.S. workers, 69,000 of whom will be in Wisconsin.

Separately, the Associated Builders and Contractors, the National Association of Home Builders and other groups connected with the construction industry filed a lawsuit on Tuesday challenging the new rules in the U.S. District Court for the Eastern District of Texas. In a news release announcing the suit, the ABC — a group that mostly represents nonunion contractors — contended that the provision allowing for adjustments every three years will make it hard for contractors to forecast how labor expenses will affect project costs.

“These projects often last longer than three years and are meticulously planned in order to stay on time and budget,” said Kristen Swearingen, ABC vice president of legislative and political affairs, in an official statement. “This rule will create uncertainty for contractors and their employees by forcing contractors to speculate about employees’ status years into the future when work on a project will actually be performed.”

Both the lawsuit filed by the ABC and other groups and the Wisconsin DOJ’s separate suit call on the courts to halt the new rules before they take effect on Dec. 1.

“Wisconsin, and every other state, must be able to set their own priorities and policies, and not be forced to take directive from an unchecked Washington, D.C., bureaucracy attempting to establish unprecedented power,” said Wisconsin Attorney General Brad Schimel.

Other representatives of the construction industry have previously come out in opposition to the new rules.

“Given the fact contractors are being forced by private and public owners to deliver projects on tighter margins than ever before, nobody should labor under the assumption this new mandate will lead to increased compensation for people working in construction,” Brian Turmail, spokesman for the Associated General Contractors of America, said in May, shortly after the new rules were announced. “Instead, contractors will be forced to put in place new measures to ensure that employees covered by the rule do not work more than 40 hours a week.”

The new overtime rules are only one in a series of federal policies affecting pay and employment conditions that have been decried by the construction industry over the past year. On Aug. 1, the government increased the penalties imposed on companies that violate Occupational Safety and Health Administration rules.

The adjustment took the maximum penalty for serious violations up from $7,000 to $12,741 and the maximum for willful and repeated violations up from $70,000 to $124,709. Also on Aug. 1, U.S. Department of Labor increased the penalties charged by its Wage and Hour Division for each violation of minimum-wage and overtime rules, taking them up from $1,100 to $1,894.

Industry representatives have also spoken out against Occupational Safety and Health Administration rules released in March seeking to curtail workers’ exposure on job sites to silica dust, a contaminant linked to respiratory diseases. Various industry groups, including the AGC and ABC, have mounted a legal challenge calling for the courts to review the rule.

The new standard calls on employers to prevent workers from being exposed to more than 50 micrograms of silica for every cubic meter of respirable air in an eight-hour period. The former rule had limited exposure to 250 micrograms for each cubic meter.

About Dan Shaw, dshaw@wislawjournal.com

Dan Shaw is the managing editor at the Wisconsin Law Journal. He can be reached at dshaw@wislawjournal.com or at 414-225-1807.

3 comments

  1. Just because a person is called “manager” and is on salary the state of Wisconsin thinks it’s acceptable to pay that person $11.38/hr ($23,660/yr) and make s/he works more than 40 hr/wk without even straight time pay? Let alone overtime pay! I found it un-American.

  2. Corporate greed has caused the US government to mandate these new labor laws, so stop being so greedy, and let we the people who work our a** off get rewarded for our long hard days…….

  3. This lawsuit is insane and idiotic. It is a sham and a total waste of valuable resources. These states use public funds to launch this expensive fraudulent endeavor. The general public supports these labor rule changes. Who in their right mind doesn’t want to get fair wages? Only corrupt state officials who are paid under the table by multinational corporations are on a crusade to deny workers of fair wages.

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