21 States Challenge DOL Overtime Rule

The Attorney General of Texas announced today that a lawsuit was filed on behalf of 21 states challenging the Department of Labor's overtime rules which are set to go into effect on December 1st.  The lawsuit was filed in the Eastern District of Texas.  You can read a copy of the complaint here:  https://www.texasattorneygeneral.gov/files/epress/Complaint_-_Filed.pdf 

The plaintiffs contend that The Obama Administration exceeded its authority in raising the salary threshhold from $455 per week to $913 per wek.  The plaintiffs also challenge the automatic indexing increases in that salary threshhold.  According to the complaint, the new rules will result in substantial harm to the states, employers and employees.  For example, in the state of Iowa, the new rule will result in the expenditure of an additional $19.1 million each year.  Jobs will be slashed in all of the states.  More part-time jobs will be created. 

What is interesting about the complaint is its recital of the history of the white collar exemptions.  Read paragraphs 30-36 of the complaint.  Congress did not impose a salary test at all.  That was imposed by the DOL.  (The first person who can tell me the year when the salary requirement was imposed gets a Starbucks card.  Past winners excluded.) 

It is also interesting to note that Nevada, Arizona and Utah -- states close to California and who love to steal away jobs from the Golden State -- are part of the 21 states challenging the law.  Why wouldn't they join the lawsuit?  Paying less to its employees makes it much easier to encourage employers to leave California. 

Obama Proposes Overtime Overhaul

Under federal law, an employee can be considered exempt from overtime if (s)he earns more than $23,660 per year.  In California, to be considered exempt, many employees must earn at least $37,440. 

President Obama is proposing that the minimum salary be raised to $50,440. According to the President, this will give five million workers a raise.  And of course, the President does not need Congressional approval for this action.  (Have we seen this before?)  A court battle is expected, as are some legilslative wranglings on Capitol hill. 

If you want to learn more, watch the President's cartoon.  Copy and paste this link into your browser:  www.dol.gov/featured/overtime/