On Tuesday, Nevada Attorney General Adam Paul Laxalt announced that a U.S. District Court preliminarily enjoined the U.S. Department of Labor’s new overtime rule. The rule was originally scheduled to take effect on December 1, 2016, and was challenged on September 20th of this year by a 21-state coalition led by Laxalt.
The Washington Times says that implementation of the rule would have made more than 4 million private-sector workers eligible for mandatory extra pay or time off.
The ruling applies nationwide and to all employers, including states and private businesses.
According to Bloomberg News, the decision is a victory for the states and business groups that sued, who argued that the new rule would increase government costs in their states by $115 million next year alone and would put private employers on the hook for millions of dollars more, possibly leading to layoffs.
Participating states urged the federal court to prevent the rule from going into effect pending a final decision on the rule’s legality. After briefing and argument from attorneys in the Nevada Attorney General’s Solicitor General’s Office, Federal District Judge Amos Mazzant preliminarily enjoined the rule from being imposed by the federal government.
Laxalt said in a press release, “Federal agencies cannot unilaterally reinterpret federal law to impose burdens on state governments and businesses, and today’s preliminary injunction reinforces the importance of the rule of law and constitutional government. Left unchecked by the Court, this latest example of federal overreach would have imposed millions of dollars of unfunded liabilities on the States, a loss of private sector jobs, huge financial and regulatory burdens on small businesses, and undoubtedly caused great difficulty across the country in implementing this oppressive rule. Businesses and state and local governments across the country can breathe a sigh of relief now that this rule has been halted.”
The Fair Labor Standards Act sets a federal minimum wage and requires overtime pay for employees working over 40 hours per week. The same law requires an overtime exemption for “any bona fide executive, administrative, or professional” employees, leaving the Department of Labor to define the job duties of those categories of employees.
On May 23 of this year, in response to President Obama’s directive to revisit its overtime rule, the U.S. Department of Labor issued a new rule that categorically denies an overtime exemption to any employee making less than $47,476 per year, regardless of whether the employee performs executive, administrative, or professional duties. The States and business plaintiffs challenged the new rule as inconsistent with the clear requirements of the Fair Labor Standards Act, among other things.
In addition to Nevada, other states represented in this challenge include: Alabama, Arizona, Arkansas, Georgia, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Michigan, Mississippi, Nebraska, New Mexico, Ohio, Oklahoma, South Carolina, Texas, Utah and Wisconsin.