Lawsuit Filed by 21 States Challenges President Obama’s Overtime Rule

Officials from 21 states and a coalition of business groups led by the U.S. Chamber of Commerce filed a pair of lawsuits on Sept. 20 challenging the Obama Administration's final overtime rule. The dual lawsuits contend that the Labor Department exceeded its authority by finalizing such a large increase, as well as by including a provision that would automatically increase the threshold every three years to the 40th percentile of income in the nation's lowest-earning region.

Specifically, effective Dec. 1, the controversial overtime rule lifts the overtime pay threshold from $23,660 to $47,476. The rule is expected to impact 4.2 million executive, administrative and professional employees who are paid by the hour or earn less than the threshold.

The final rule would harm the ability of apartment housing employers to implement, and their impacted employees, including property managers at traditional apartment and student housing developments, to take advantage of flexible scheduling options. In addition, the rule would limit career advancement opportunities for employees. The rule also goes far beyond the apartment housing industry and has the potential to affect employees at colleges and universities who serve student housing residents.

NAA/NMHC strongly oppose the overtime rule and are supporting all avenues that would either repeal or limit the rule. It is possible that the House may take up legislation introduced by Reps. Tim Walberg (R-MI) and John Kline (R-MN) to delay the rule until June 2017. Republicans may also look to deny funding to implement the rule in appropriations legislation to be considered in a lame-duck session after the election. Both efforts are likely to face White House opposition.

Please join us on Oct. 25 when NAA/NMHC will host a members-only webinarregarding guidance on implementing the overtime rule. Prepared by Jennifer Redmond and Brian Fong of Sheppard Mullin, the guidance describes the rule in detail and provides issues for owners, operators and developers of apartment housing to consider as they seek to comply with the new rule.

Provided by NMHC as part of the NAA/NMHC Joint Legislative Program