State Of Texas Is Fighting U.S. Government’s New Overtime Rule

As Reuters reported, the state of Texas has filed a lawsuit that seeks to vacate a Biden administration overtime regulation.

This rule would make millions of additional workers eligible for overtime pay while placing new constraints on employers, reducing flexibility for the workers who will be reclassified, forcing companies to make painful choices that limit both job creation and growth opportunities available to employees, and complicating manufacturers’ efforts to fill millions of jobs that are projected to be created by the industry over the next decade.

Specifically, as Connecting the Dots explained earlier this year, the U.S. Department of Labor (DOL) rule changes the salary threshold used to determine whether a worker is exempt from overtime pay so that, eventually, most employees earning less than $58,656 will be owed time-and-a-half wages for working more than 40 hours in a single workweek. (The current salary threshold is $35,568.)

The regulation also provides an alternative test for certain highly compensated employees who are paid a salary, earn above a higher total annual compensation level, and satisfy a minimal duties test.

In a complaint filed in federal court, Texas Attorney General Ken Paxton argued the rule violates federal wage law by basing eligibility for overtime on how much workers are paid, rather than the duties they perform. Paxton also argued the regulation violates states’ constitutional right to structure the pay of state employees and allocate their budgets.

Also last week: software company Flint Avenue filed a suit arguing the overtime rule “is arbitrary and capricious, and that the DOL lacked the authority to issue the change.”

Stay tuned toConnecting the Dots as these lawsuits make their way through the federal court system.