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    Home » Legislation & Regulations » Federal Court Sets Overtime Rule Aside
    Federal

    Federal Court Sets Overtime Rule Aside

    BEX StaffBy BEX StaffNovember 19, 2024No Comments3 Mins Read
    Credit: Builder Magazine
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    By Associated Builders and Contractors

    Associated Builders and Contractors has applauded the decision of the U.S. District Court for the Eastern District of Texas, which set aside the U.S. Department of Labor’s controversial 2024 final rule, Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees. The rule changed overtime regulations under the Fair Labor Standards Act.

    The court found that the Biden-Harris Labor Department’s 2024 overtime rule’s July 1, 2024, increase was unlawful as well as the scheduled Jan. 1, 2025, increase. Specifically, DOL’s final rule increased the minimum annual salary level threshold for exemption to $43,888 on July 1, and on Jan. 1 it was scheduled to increase to $58,656. In addition, salary thresholds would have been updated every three years starting on July 1, 2027.

    “This decision is the correct one, and an important win for ABC members and the rest of the regulated community,” said Ben Brubeck, ABC VP of regulatory, labor and state affairs. “It’s also no surprise. In 2017, this court permanently enjoined the DOL’s 2016 overtime rule on similar grounds, writing that the rule increased the minimum salary level threshold for exemption far beyond a level which the DOL is permitted to adopt. The court also found unlawful the automatic indexing provision in the new rule that would have further increased the salary threshold without the notice-and-comment rulemaking required by the Administrative Procedure Act.

    “Some ABC members employ workers who would have lost their exempt status as of Jan. 1 because of the 2024 overtime rule’s scheduled increase,” said Brubeck. “This would have disrupted the construction industry, specifically harming small businesses, restricting employee workplace flexibility in setting schedules and hours, and hurting career advancement opportunities.

    “The 2024 rule’s radical increase in the salary threshold for exemption would have also further complicated the current economic outlook,” said Brubeck. “Multiple industries, like construction, are grappling with uncertain economic conditions such as high interest rates, supply chain disruptions, materials price inflation and workforce shortages, all of which push operational costs ever higher. Specifically, ABC estimates that the construction industry must hire more than half a million additional workers in 2024 to meet demand. The rule’s triennial automatic indexing provision would have exacerbated its harmful impact on businesses and added to rampant inflation that is already harming the economy as a whole.”

    On May 22, ABC joined a coalition of business groups in filing a complaint in the U.S. District Court for the Eastern District of Texas challenging the DOL’s overtime rule.

    On Nov. 7, 2023, ABC called on the DOL to withdraw the proposed rulemaking. ABC also signed onto coalition comments criticizing the overtime proposed rule, joining 244 national, state and local organizations representing employers from a wide range of private industries and public, nonprofit and education sectors. (Source)

    ABC Administrative Procedure Act annual salary level threshold exemption Associated Builders and Contractors Defining and Delimiting the Exemptions DoL economic conditions Fair Labor Standards Act Federal inflation interest rates labor policy labor shortage legal materials prices operational costs overtime rule supply chain U.S. Department of Labor U.S. District Court for the Eastern District of Texas workforce shortage
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