States Balk at Feds’|Higher Overtime Ceiling

     SHERMAN, Texas (CN) — Texas and 20 other states said Tuesday that President Barack Obama is illegally rewriting federal law to double the income ceiling for employees eligible for overtime in a way that will hurt the economy.
     Texas and Nevada filed a federal complaint against the U.S. Department of Labor Tuesday in the Eastern District of Texas, six months after Obama directed the agency to double the overtime exemption for white-collar employees under the Fair Labor Standards Act from $23,660 to $47,476.
     Taking effect on Dec. 1, the change is expected to raise the incomes of 12.5 million workers and boost wages by $12 million in the next decade as many more workers become eligible for overtime. The rule will automatically adjust the salary threshold every three years for inflation.
     Texas Attorney General Ken Paxton says the new rule lacks valid congressional authorization and will be costly, and that none of those most affected by the rule will be able to provide their input before the rule is imposed.
     “The overtime rule will force many state and local governments, as well as private businesses, to substantially increase their employment costs,” Paxton said in a statement. “Some governments and private businesses may even be forced to eliminate services or lay off employees. The numerous crippling federal regulations that the Obama administration has imposed on businesses in this country have been bad enough. But to pass a rule like this, all in service of a radical leftist political agenda, is inexcusable.”
     The states’ complaint claims that the Labor Department had earlier acknowledged that nothing in legislative or regulatory history “would support indexing or automatic increases,” that “the department believes that adopting such approaches in this rulemaking is both contrary to congressional intent and inappropriate.”
     Texas and the other states believe that the automatic adjustments allows the federal government to “unilaterally deplete state resources” and force them to submit to federal policies, according to the complaint.
     “Without a limiting principle (and DOL has recognized none) the federal executive could deliberately exhaust state budgets simply through the enforcement of the overtime rule,” the 30-page complaint states. “But even aside from that possibility, there is no question that the new rule, by forcing many state and local governments to shift resources from other important priorities to increased payroll for certain employees, will effectively impose the federal executive’s policy wishes on state and local governments.”
     Joining in the lawsuit are Alabama, Arizona, Arkansas, Georgia, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Michigan, Mississippi, Nebraska, New Mexico, Ohio, Oklahoma, South Carolina, Utah and Wisconsin.
     Oklahoma Attorney General Scott Pruitt said Obama “does not have the authority to dictate to Oklahoma or any other state how they should budget” state worker pay.
     “Working families across the state could face increased hardships resulting from this new rule, such as hours being reduced, salaries being slashed, and overtime hours going unrecognized,” Pruitt said.
     Secretary of Labor Thomas E. Perez said he looks forwards to “vigorously defending” the agency’s efforts to “give more hardworking people a meaningful chance” to make ends meet. He expressed “confidence in the legality of all aspects” of the new rule and deemed the lawsuit as partisan politics.
     “Despite the sound legal and policy footing on which the rule is constructed, the same interests that have stood in the way of middle-class Americans getting paid when they work extra are continuing their obstructionist tactics,” he said in a statement Wednesday. “The overtime rule is designed to restore the intent of the Fair Labor Standards Act, the crown jewel of worker protections in the United States. The crown jewel has lost its luster over the years: in 1975, 62 percent of full-time salaried workers had overtime protections based on their pay; today, just 7 percent have those protections – meaning that too few people are getting the overtime that the Fair Labor Standards Act intended.”
     Between 1938 and 1975, the overtime salary threshold rose every five to nine years through actions by Republican presidents Eisenhower, Nixon and Ford and Democratic presidents Truman and Kennedy.
     From 1975 until 2004, the overtime threshold saw just one update: in 2004 during the George W. Bush administration, when the threshold was set at $23,660 — below the poverty level for a family of four.

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