In May, in response to an Order from President Obama, the U.S. Department of Labor issued a new overtime rule that revises the Fair Labor Standards Act’s overtime exemption for executive, administrative, and professional employees—the so-called “white collar” exemption. The new overtime rule doubles the salary-level threshold for executive, administrative, and professional employees to be exempt from overtime. After December 1, 2016, all employees – including state and local government employees – are entitled to overtime if they earn less than $47,476 annually regardless of whether they perform executive, administrative, or professional duties. Additionally, the new rule contains a ratcheting mechanism to automatically increase the salary-level every three years without going through the standard rule-making process required by federal law.
“The cascade of unauthorized rules and regulations continuing to pour out of Washington in the final months of this presidential administration is truly breathtaking,” Schmidt said. “The federal strategy appears to be throwing many new regulations at the wall and see what sticks. In this case, the unauthorized federal mandate affects not only private businesses but state taxpayers, who will bear the added cost imposed on state government. Our legal objection is that any power to impose this mandate on states rests with Congress, which has not delegated that power to the bureaucrats at the U.S. Department of Labor.”
Schmidt noted that the new overtime rule will affect about 550 exempt Executive and Judicial Branch employees, roughly 20 percent of all exempt state employees. The Department of Labor estimates that approximately 40,000 private employees in Kansas will also be affected by the new overtime rule. The complaint filed today urges the court to prevent the implementation of the new rule before it takes effect, which is scheduled for December 1, 2016.
In addition to Kansas, other states joining this filing include: Alabama, Arizona, Arkansas, Georgia, Indiana, Iowa, Kentucky, Louisiana, Maine, Michigan, Mississippi, Nebraska, Nevada, New Mexico, Ohio, Oklahoma, South Carolina, Texas, Utah and Wisconsin.
The case is State of Nevada, et al. v. United States Department of Labor, et al., in the United States District Court for the Eastern District of Texas, Case No. 1:16-cv-00407.
A copy of the complaint can be found here: http://bit.ly/2cWO1C3 .
