A bevy of 21 states, including Texas, Oklahoma, Arizona, and New Mexico, filed suit in federal court against the U.S. Department of Labor seeking to block the DOL’s new overtime rule. The extensive complaint, filed in the U.S. District Court for the Eastern District of Texas, argues in relevant part that the DOL’s rule “defies the statutory text of 29 U.S.C. 213(a)(1), Congressional intent, and common sense” [Complaint, p. 2]. Among the states’ other allegations is a contention that the new overtime rule is a “palpable” threat to the States’ budgets and, consequently, the system of federalism.
In May 2016, the U.S. Department of Labor (DOL) issued the new rule, which significantly expands the number of U.S. workers who are entitled to the Fair Labor Standards Act’s minimum wage and overtime pay protections. Among other things, the new rule more than doubles the salary threshold below which most white-collar, salaried workers are entitled to overtime. The “old” threshold was $455 per week (or $23,660 annually for a full-year worker). The “new,” challenged threshold is $913 per week (or $47,476 annually for a full-year worker).
The DOL estimates that the rule will impact as many as 4.2 million workers, including many who work for state and local governments, who will either (a) get raises to increase their salaries above the new threshold level or (b) get new overtime protections (i.e., spend less time at work). Texas and her sister states counter that the 10th Amendment, which reserves for the states or the people all powers not expressly granted to the federal government, prevents the President and/or the DOL from making wholesale changes in how much states must pay their workers. The states also say the Labor Dept. focused on salary levels to the exclusion of all other tests required to interpret the law, which merely exempts from overtime employees in managerial, professional, or administrative roles.
Legal experts note that the complaint adopts wording keyed to the U.S. Supreme Court’s decision in National Federation of Independent Business v. Sibelius, in which 26 states successfully challenged the Medicaid expansion plan contained in the Affordable Care Act (Obamacare) as being unconstitutionally coercive.
This isn’t the first time that most of the plaintiff states have joined together in combating administrative rules from Washington D.C. Most of them joined in several other efforts to block rules put in place by President Obama, who has increasingly turned to executive orders and administrative rulings to maneuver around what he has described as an uncooperative Congress. For example, the President’s plan to extend semi-permanent residency status to millions of illegal immigrants was blocked by another federal judge in Texas. That decision remains in force, due to a deadlock in the U.S. Supreme Court back in June.
The DOL’s new overtime rule is effective December 1, 2016. It affects large and small employers alike. Many business owners acknowledge that they are confused not only by the new rule, but also by the maze of regulations that seem to come from every direction. Indeed, maneuvering within the complex world of government regulations can be difficult. Many businesses have found it prudent to retain experience legal counsel to assist them.
The attorneys at Romano & Sumner, LLC have more than 20 years of combined experience providing expert legal assistance to business clients. We represent clients in all types of business and legal concerns, including those related to employment practices. We have extensive experience in litigation, if that becomes necessary. We pride ourselves not only upon our professionalism, but also upon our client service. We return phone calls within one business day. We keep clients informed. We complete the work within the allotted time frame. Call us at 281-242-0995 or complete our online contact form.
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