BATONN ROUGE, La. (KNOE & News Releases) - A federal court is blocking implementation of a regulation that would make an estimated 4 million more higher-earning workers eligible for overtime pay.
The U.S. District Court in the Eastern District of Texas granted a nationwide preliminary injunction Tuesday that prevents the Department of Labor from implementing the changes until the rule's legality can be further examined. The order comes after 21 states sued to block the rule before it took effect on Dec. 1.
The lead plaintiff was Nevada Attorney General Adam Laxalt, who's a frequent critic of what he calls Obama Administration overreach.
The regulation would shrink the so-called "white collar exemption" and more than double the salary threshold under which employers must pay overtime to their workers.
Laxalt said the rule would burden private and public sectors.
Tuesday night, Louisiana Attorney General Jeff Landry issued the following statement about the preliminary injunction:
“As I have often said, the Executive Branch cannot unilaterally make or change law; today, the court once again confirmed that. I applaud the court for ensuring proper balance between the branches of government and for halting this red-tape, job-killing bureaucratic edict. I was proud to stand with 20 other states in this fight for our businesses and employees, and I will continue to do all that I can to help employers hire and keep Louisiana workers.”
U.S. District Court Judge Issues Nationwide Injunction Preventing Implementation of DOL's Planned Overtime Rule
Last night, U.S. District Judge Amos Mazzant issued a nationwide preliminary injunction preventing the implementation of the Department of Labor's Overtime Rule previously set to take effect on December 1. The proposed rule would have made 4.2 million private-sector workers eligible for expanded overtime protections. Employers are no longer required to meet the December 1 deadline. The rule was set to increase the exemption threshold to $47,476, more than doubling the current threshold and creating concern among many employers and small business owners.
Mazzant, a Texas federal judge, found that the Department of Labor had likely exceeded its statutory authority in setting a salary threshold higher than necessary to exempt "any employee employed in a bona fide executive, administrative, or professional capacity." Because the current salary threshold increase was unlawful under the plain meaning of the statute, the Department of Labor "also lacks the authority to implement the automatic updating mechanism."
While the Department of Labor is likely to appeal the decision, the timing is such that the fate of the overtime rule is now in the hands of the 115th Congress and the incoming Trump Administration. Until this rule is officially withdrawn by the Department of Labor or no appeal of the case is sought, it could come back again with an unfavorable ruling on appeal. The NAM will continue to advocate with policymakers in Congress and on the transition team about the excessive costs of $24 billion over the next 10 years to implement this rule.
U.S. Chamber of Commerce Senior Vice President of Labor, Immigration, and Employee Benefits Randy Johnson issued the following statement regarding the decision by the district court in Sherman, Texas to grant a preliminary injunction blocking the Department of Labor's (DOL) new overtime regulation nationwide: "We are very pleased that the court agreed with our arguments that the Obama administration's new overtime rule was unlawful and stopped the rule from taking effect on December 1. If the overtime rule had taken effect, it would have resulted in significant new costs - more than $1 billion according to the Congressional Budget Office - and it would have caused many disruptions in how work gets done. Furthermore, the rule would have reduced workplace flexibility, remote electronic access to work, and opportunities for career advancement. This is a great result."
The NAM also issued a press release on the decision which can be found here. The full text of the District Court's decision can be found here.
Arkansas Attorney General Leslie Rutledge released a statement after Mazant granted the request of 21 states to enjoin the U.S. Department of Labor's (DOL) overtime rule.
This "injunction is an important victory that will help protect countless Arkansas business owners, nonprofits, sheriffs, mayors and county judges from increased costs and forced layoffs," said Attorney General Rutledge. "Many across our State have expressed grave concerns about how they would continue to operate if the rule took effect next week. I am grateful to Judge Mazant for granting this important injunction until the full legality of the rule can be determined, and I hope the Department of Labor will ultimately reconsider this ill-advised rule."
Rutledge joined a coalition of 21 states in filing a lawsuit challenging the rule. If implemented, the rule would likely force the State of Arkansas, local cities and counties and countless small businesses and nonprofits, to substantially increase their employment costs. Many entities might be forced to eliminate some services and fire employees because of the increased expenses.
President-elect Donald Trump has yet to say what his plans are for the overtime rule. He had previously said was in favor of exceptions for small businesses.
BATON ROUGE, LA – Attorney General Jeff Landry has joined a coalition of 21 states in filing a federal court complaint challenging the United States Department of Labor’s new overtime rule.
If implemented, the new rule will more than double the minimum salary overtime threshold (from $455/wk to $913/wk) for public and private workers. The complaint urges the court to prevent the implementation of the new rule before it takes effect, which is scheduled for December 1, 2016.
“Once again, the President has circumvented Congress and attempted to legislate through executive mandate. Like Obamacare before it, this latest overreach will force employers to hire less people and cut hours of their existing workers,” said General Landry. “This red-taped bureaucratic edict will especially hurt the Louisiana workforce in the education, retail, government, health, hospitality, and professional service industries. For their sake and the sake of federalism, I have joined Attorneys General from across the country to stop this job-killer.”
In addition to Louisiana, the other states who joined this filing are Nevada, Alabama, Arizona, Arkansas, Georgia, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Michigan, Mississippi, Nebraska, New Mexico, Ohio, Oklahoma, South Carolina, Texas, Utah, and Wisconsin.
AG Jeff Landry Applauds Court for Halting Overtime Rule
BATON ROUGE, LA – Louisiana Attorney General Jeff Landry issued the following statement after the U.S. District Court in Texas granted a preliminary injunction against the United States Department of Labor’s overtime rule:
“As I have often said, the Executive Branch cannot unilaterally make or change law; today, the court once again confirmed that. I applaud the court for ensuring proper balance between the branches of government and for halting this red-tape, job-killing bureaucratic edict. I was proud to stand with 20 other states in this fight for our businesses and employees, and I will continue to do all that I can to help employers hire and keep Louisiana workers.”#
President Barack Obama ordered the Department of Labor in 2014 to revise the Fair Labor Standards Act’s overtime exemption for executive, administrative, and professional employees – the so-called “white collar” exemption – to account for the federal minimum wage. On May 23, 2016, the Department of Labor issued the final new overtime rule. It doubles the salary-level threshold for employees to be exempt from overtime – regardless of whether if they perform executive, administrative, or professional duties. After December 1, 2016, all employees are entitled to overtime if they earn less than $913 a week – including state and local government employees. 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.