Overtime Rules: 21 States Sue To Block New US Labor Department Threshold

Twenty-one states Tuesday filed suit challenging new federal rules on overtime pay, saying they fail to take into account congressional intent, pose an undue burden on businesses and threaten to drain state budgets.

Nevada, Texas, Alabama, Arizona, Arkansas, Georgia, Indiana, Kansas, Louisiana, Nebraska, Ohio, Oklahoma, South Carolina, Utah, Wisconsin, Kentucky, Iowa, Maine, New Mexico, Mississippi and Michigan filed suit in federal court in Plano, Texas, seeking to overturn the Obama administration’s revision of the overtime exemption.

The suit seeks to have the new rules declared unconstitutional and an injunction to prevent them from being enforced.

The suit complains the Labor Department merely doubled the salary basis in determining who is eligible for overtime rather than considering the type of work performed.

“Thus, under the premise of updating regulations related to the FLSA [Fair Labor Standards Act], DOL [Labor Department] has disregarded the actual requirements of the statute and imposed a much-increased minimum salary threshold that applies without regard to whether an employee is actually performing ‘bona fide executive, administrative or professional’ duties,” the complaint reads.

The new rules allow those making as much as $913 a week to collect overtime, up from $455, opening overtime protections to 4.2 million more U.S. workers. The rules, which took effect Dec. 1, update the salary threshold every three years.

The suit says the rules defy congressional intent and common sense, disregarding the type of work performed and making salary the determinant factor. The suit also criticizes the three-year indexing feature, saying it fails to take economic conditions into consideration.

“The new rule exceeds constitutional authorization too,” the lawsuit continues. “Under the new overtime rule, states must pay overtime to state employees [who] are performing executive, administrative or professional functions if the state employees earn a salary less than an amount determined by the executive branch of the federal government.” As such, the suit says, the rules present a threat to state budgets.

The Federal Labor Standards Act took effect in 1938 and guarantees workers will receive no less than the minimum wage. The salary test was not added until 1940 and has been steadily raised since.

The suit says the Department of Labor “openly acknowledges that the revisions effectively create a minimum overtime-exempt salary level for white-collar employees … [and] disregarded concerns expressed by local governments that they do not have the same ability as private employers to increase prices or reduce profits.”

Texas Attorney General Ken Paxton said in a press release the new rules are part of the administration’s “radical leftist agenda” and accused President Barack Obama of “trying to unilaterally rewrite the law.” He said the rules could mean disaster for the U.S. economy.