Arkansas is joining 20 other states in suing the U.S. Department of Labor’s overtime rule, which would double the salary level threshold for employees to be exempt from overtime.
The lawsuit asks the court to prevent the rule from going into effect as scheduled on Dec. 1. In a press release Tuesday, Attorney General Leslie Rutledge said the regulation has been a regular topic of conversation around the state.
“Business owners, sheriffs, mayors and county judges are all concerned about how they are going to implement this rule without being forced to fire hardworking employees,” she said in the press release. “Washington is once again trying to force a political agenda on the states by unlawfully ignoring the role of Congress, and I hope that the court will act and prevent this rule from taking effect.”
President Barack Obama on March 13, 2014, ordered the Department of Labor to change the Fair Labor Standards Act’s overtime exemption for salaried executive, administrative and professional employees. The department issued its final rule on May 23.
Under the rule, all public and private employees earning up to $913 a week, or $47,476 annually, would be entitled to overtime. The current threshold is $455 a week or $23,660 annually. The rule would set the standard salary level at the 40th percentile of earnings of full-time salaried workers in the lowest-wage Census Region in the South. The new rule also would set the total annual compensation requirement for highly compensated employees at $134,000. Salary levels would increase every three years without undergoing a rule-making process.
According to the Department of Labor’s website, the rule would extend the right to overtime pay to 4.2 million additional workers. It also would change one of the tests involved in determining if an employee is entitled to overtime – the “duties test,” which states that the employee’s job duties must primarily involve executive, administrative or professional duties. According to the website, that test has led to employees becoming ineligible for overtime despite working virtually the same jobs as overtime-eligible coworkers. The changing of the duties test will affect 5.7 million white collar salaried workers and 3.2 million blue collar workers.
Talk Business & Politics reported in May that the change would affect 52,000 Arkansas workers. Michael Harvey, Northwest Arkansas Council chief operating officer, said then that employers would respond to the new rule by requiring employees to work 40 hours, track their time, and pay overtime when necessary. Some businesses might split hours between two employees.
Randy Zook, president and CEO of the Arkansas State Chamber of Commerce/Associated Industries of Arkansas, said in May, “If the intent is to help the middle class, this is a foolish way to do it. Once again, unintended consequences will produce an unexpected – and undesirable – outcome.”
Arkansas AFL-CIO President Alan Hughes supported the rule in May.
“We are proud of President Obama taking this important step, and we think it needed to be done and will help double the salaries of some workers,” he said then. “This not helps Arkansas workers, but this extra money in their pocket will also be put right back into the Arkansas economy. Sone of our workers live from paycheck to paycheck and this is a step back to where the (overtime rules) ought to be.”
The lawsuit is led by Nevada Attorney General Adam Paul Laxalt. Also involved are attorneys general from Alabama, Arizona, Georgia, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Michigan, Mississippi, Nebraska, New Mexico, Ohio, Oklahoma, South Carolina, Texas, Utah and Wisconsin.