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Michigan among states suing to stop expansion of overtime pay

Sep 21, 2016

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Michigan is one of 21 states seeking to block the Obama administration's efforts to make more white-collar workers eligible for overtime pay.

The coalition of states filed suit Tuesday in federal court in Texas asking the court to stop a new U.S. Department of Labor rule from taking effect on December 1.  

The U.S. Chamber of Commerce and other business groups also filed a legal challenge to the rule on the same day.

The new regulation would require employers to pay overtime to white-collar workers who earn less than $913 weekly. That's about twice the current cutoff of $455 per week for overtime eligibility.

According to the Department of Labor, the new salary level is set at the 40th percentile of earnings of full-time salaried workers in the lowest-wage Census region, currently the South. 

"This rule could have a significant impact on taxpayers and job creation. We joined with nearly half of U.S. states to fight against a federal overreach that could cost Michigan residents jobs and services," said Andrea Bitely, spokesperson for Michigan Attorney General Bill Schuette, in a written statement.

The lawsuit claims the rule is  unconstitutional, violates federal rule-making procedures, and exceeds Congressional authorization.

U.S. Secretary of Labor Thomas E. Perez said in a written statement that he is confident of the legality of the rule, describing the lawsuits as partisan. 

"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," said Perez.

Perez noted that overtime protections have diminished over the decades, applying to 62% of full-time salaried workers in 1975, and just 7% today.