State of Texas Sues to Stop New Federal Overtime Rules

Texas Attorney General Ken Paxton has sued the federal government again, this time in hopes of stopping new labor rules that would make 5 million workers eligible for time-and-a-half overtime pay in December.

The new Department of Labor regulations raise the minimum salary at which workers are not required to be paid overtime for hours worked in excess of 40 each week to $47,500. Currently, employers are allowed to skip overtime payments for employees making more than $23,660 annually. Paxton, and the 20 other states attorneys general who are joining him in his lawsuit, believe that the new regulations will hurt businesses and the economy.

“Once again, President Obama is trying to unilaterally rewrite the law,” Paxton said Tuesday. “And this time, it may lead to disastrous consequences for our economy. 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.”

Earlier this year, when the new regulations were finalized, Rob Friedman, a labor-focused lawyer for Dallas' Littler Mendelson, told the Observer that the new law was unlikely to immediately benefit many workers.

Some employees making near the cutoff, he said, might get modest raises so they'd be above the floor. Those closer to the current minimum could see their jobs become hourly or otherwise modified to avoid their working overtime."You'd pay the hourly, but you'd back into it trying to figure out the number of hours you expect them to work and what you would pay them hourly with overtime," Friedman said. "The other thing that could happen is, companies could cut exempt employees and rely on fewer and fewer people to do the same job."

Paxton's suit claims that the new rule was implemented without proper congressional approval, something Paxton says will be compounded every three years if the new regulation isn't stopped.

"Even worse, the new rule contains a ratcheting mechanism to automatically increase the salary level every three years without going through the rule-making process required by law. As a result, none of the groups affected by the changes to the rule — workers, employers, governments, and the public in general — will have the ability to provide their valued input before the federal government imposes these massive changes on the economy," he says.

Without judicial intervention, the new salary floor is slated to kick in Dec. 1.