Industry associations oppose DOL overtime rule

Associated Builders and Contractors, Washington, announced the filing of a complaint in the U.S. District Court for the Eastern District of Texas, Sherman Division, challenging the U.S. Department of Labor’s  (DOL’s) final rule, Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees, which will change overtime regulations under the Fair Labor Standards Act.

DOL’s new final rule increases the minimum annual salary level threshold for exemption in two phases: from $35,568 to $43,888 on July 1, and to $58,656 on Jan. 1, 2025. In addition, salary thresholds will be updated every three years starting July 1, 2027.

“Regrettably, here we go again,” says Ben Brubeck, ABC vice president of regulatory, labor and state affairs. “In 2017, this court permanently enjoined the DOL’s 2016 overtime rule. We are ... again back before the court because the DOL, in direct defiance of this court’s previous ruling, decided to move forward with a new overtime rule that increases the minimum salary level threshold for exemption far beyond a level [that] the DOL is permitted to adopt. In addition, it includes an unlawful automatic indexing provision that will further increase the salary threshold without the notice-and-comment rulemaking required by the Administrative Procedure Act.”

According to the construction industry trade association, virtually all ABC’s members employ workers who qualify for exempt status, and the DOL’s 2024 rule will reclassify a massive amount of ABC member employees who currently qualify for exempt status as nonexempt.

“This will disrupt the entire construction industry, specifically harming small businesses, as the rule will greatly restrict employee workplace flexibility in setting schedules and hours, hurting career advancement opportunities,” Brubeck says.

The National Demolition Association (NDA), Washington,  is also advocating for legislation in Congress to overturn the final overtime rule.

Last year, the association submitted comments to the DOL opposing the increases to the minimum salary thresholds and automatic updates that it says “do not take into account current economic conditions.”

“NDA believes employees and employers are the best parties to determine issues ranging from wages and working conditions, through … individual or collective bargaining, within the boundaries of the law,” NDA stated in its comments. “Employers and employees are appropriately served by overtime regulations that promote flexibility in structuring employee hours, career advancement opportunities for employees, and clarity for employers in classifying their employees under the FLSA.

“In addition, NDA believes any increase to the overtime pay eligibility threshold must [consider] regional variations in wages and cost of living as well as current economic conditions.”

Among NDA’s complaints, it highlighted the rule’s negative impacts on employers and employees, such as limits on career advancement opportunities for employers reclassified from salaried to hourly and limits on the ability for employers to provide remote work and flexible scheduling; burdensome compliance costs; and automatic salary threshold increases, which NDA says are “likely unlawful.”

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 various private industries and public, nonprofit and education sectors.

In 2016, the Obama administration issued a final overtime rule that would have doubled the minimum salary level for exemption from $23,660 to $47,476 per year. ABC, along with several other business groups, sued the DOL in federal court and successfully blocked the rule from taking effect.