Texas and 20 other states sued the Obama administration to block overtime rules that business groups say will boost employment costs and may force layoffs by effectively setting a federal minimum salary for white-collar workers.
Full-time executive, administrative and professional workers making less than $47,892 a year will be entitled to overtime pay starting Dec. 1, according to a complaint filed Tuesday in federal court in Sherman, Texas. This pay rate “nearly doubles” the previous salary that triggered federal overtime pay protections for public or private employees working more than 40 hours a week, the states said.
The U.S. Labor Department failed to consider regional salary and economic differences in setting the nationwide base pay rate, and didn’t consider whether all workers at this pay level should qualify as white-collar employees, according to the complaint. The government also didn’t make exceptions for small municipalities or businesses that will have a hard time paying higher salaries under the new test, the states said.
“Even worse, the new rule contains a ratcheting mechanism to automatically increase the salary level every three years” without going through the required federal law-making process, Texas Attorney General Ken Paxton said in a statement.
The suing states -- all of which except Louisiana are headed by Republican governors -- claim the Obama administration usurped Congress’s exclusive authority to set minimum wages and ignored the required public comment period before imposing its new rule. They asked a federal judge to block the rule and ultimately overturn it.
“The same interests that have stood in the way of middle-class Americans getting paid when they work extra are continuing their obstructionist tactics,” U.S. Labor Secretary Thomas E. Perez said in a statement about the states’ “partisan” lawsuit.
Perez said the department complied with federal rule-making procedures to restore overtime protection to full-time salaried workers, just 7% of whom are currently protected by the Fair Labor Standards Act today, compared to the 62% of such workers covered in 1975.
The case is Nevada v. U.S. Department of Labor, 1:16-00407, U.S. District Court, Eastern District of Texas (Sherman).