A coalition of US business groups has initiated a legal action to block a Biden administration rule that will extend mandatory overtime pay to four million workers. 

US Business Groups Seek to Block Joe Biden's Overtime Paying Rule

According to Reuters, the lawsuit filed in Sherman, Texas federal court on Wednesday claimed that the US Department of Labor overstepped its authority with this rule, which could force businesses to reduce jobs and limit working hours.

The rule would mandate employers to pay overtime premiums to employees earning less than $1,128 weekly, or around $58,600 annually, if they work for over 40 hours in a week. 

This is a substantial increase from the current threshold of $35,500 per year, which the Trump administration set in 2020. Advocacy groups and many Democrats claim this does not cover enough workers.

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Defense of Labor Department

The Labor Department argued that the rule is necessary because lower-paid salaried workers often do the same work as their hourly counterparts but do not receive additional pay for overtime hours.

However, the business groups in the lawsuit stressed that the costs of complying with the new rule will force many smaller employers and non-profits on fixed budgets to reduce "critical programming, staffing, and services to the public."

The National Federation of Independent Business, the International Franchise Association, and the National Retail Federation were among the organizations involved in the lawsuit. US District Judge Sean Jordan, an appointee of former President Donald Trump, will handle the case.

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