National Association of Counties
On September 20, 2016, 21 states, led by Nevada and Texas, filed suit in the Eastern District of Texas to challenge the U.S. Department of Labor’s (DOL) overtime exemption rule changes. [Nevada et al. v. U.S. Department of Labor et al., case number 1:16-cv-00407.]
The suit alleges DOL has overstepped its authority by establishing a federal minimum salary for professional employees referred to as “white collar” workers. The states claim the new rule will substantially increase employment costs for state and local governments, ultimately forcing governments to cut services or lay off employees. The states in the suit represented by their respective attorneys general include Texas, Nevada, Alabama, Arizona, Arkansas, Georgia, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Michigan, Mississippi, Nebraska, New Mexico, Ohio, Oklahoma, South Carolina, Utah and Wisconsin.
On May 18, 2016, DOL issued the final version of the overtime pay rule. The rule nearly doubles the threshold for exemption from overtime pay for professional employees, also referred to as “white collar” employees from $23,660 ($455 per week) to $47,476 ($913 per week). The overtime eligibility rate would also be adjusted every three years. It is set to take effect on December 1, 2016.
On September 28, 2016 the U.S. House of Representatives passed the Regulatory Relief for Small Business, Schools and Nonprofits Act (H.R. 6094) by a vote of 246-177. The bill would delay the start date of the overtime pay regulations for six months. The U.S Chamber of Commerce and other business organizations have been pushing for a repeal and/or delay on the rule’s effective date. President Obama has threatened to veto the bill, although the Senate has yet to schedule time for consideration.
NACo submitted comments to DOL expressing concerns over the increased administrative and financial burden it would impose on the nation’s counties, who employ more than 3.6 million people, providing services to over 305 million county residents. In June, Mineral County, Nev. Commission Chair Jerrie Tipton testified on behalf of NACo before the House Committee on Small Business on the Department of Labor’s overtime rule. Also, NACo released an “Analysis of the Impact of the U.S. Department of Labor’s Overtime Rule on Counties.”
NACo will continue to monitor latest developments with states’ lawsuit and overtime pay in the lame duck congressional session.
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Contact: Daria Daniel at ddaniel@naco.org or 202.942.4212
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