On Wednesday, the office of Gov. Matt Bevin announced that Kentucky has joined a coalition of 21 states in filing a complaint in federal court challenging the United States Department of Labor’s new overtime rule.
The Obama administration finalized a new overtime rule for workers in May that increases the threshold by which an employee is exempt from being paid overtime. The rule increases the previous threshold of $23,660 to $47,476 beginning on Dec. 1, 2016.
The administration estimates that 4.2 million workers nationally will now be eligible for overtime pay for any hours worked over 40.
The Ky. Chamber opposes the changes to the salary threshold and explained in formal comments to the U.S. Department of Labor (DOL) that 70,000 Kentucky workers would see themselves return to hourly work, and Kentucky businesses would endure a $19 million cost per year because of the change.
In a press release about Kentucky joining the complaint Wednesday, Bevin said the new overtime rule is a “direct violation the Tenth Amendment to the Constitution of the United States.”
“The result of this unfunded mandate by the federal government would be to force many private sector employers to lay off workers. This is not acceptable. Once again, the Obama administration is attempting to require compliance with non-legally binding edicts that should instead be decided at the state and local level. We stand united with these 21 other states in saying enough already,” Gov. Bevin said in the release.
In addition to Kentucky, other states that joined this filing include: Alabama, Arizona, Arkansas, Georgia, Indiana, Iowa, Kansas, Louisiana, Maine, Michigan, Mississippi, Nebraska, New Mexico, Nevada, Ohio, Oklahoma, South Carolina, Texas, Utah and Wisconsin.
Also this week, the U.S. Chamber along with a broad coalition of business organizations filed a legal challenge to the rule. In their announcement of the challenge, the U.S. Chamber stated that the salary threshold is inconsistent with federal law since it does not acknowledge regional and industry difference and that the automatic escalator that takes effect every three years is not authorized by the Fair Labor Standards Act.