Just prior to Labor Day, a federal judge put the final nail in the coffin of a far-reaching Obama-era Labor Department rule that was as misguided as it was unlawful.
Unlike the federal government, states such as Nevada must actually balance their budgets. That means our officials need to make hard choices on spending priorities.
Take state employee pay, for example. The state payroll has to be carefully weighed against many other spending obligations. Sometimes difficult budgetary decisions must be made. These decisions are never easy, but what should be easy to see is who should make them: State officials locally elected by the people of Nevada who are actually footing the bill.
So it was especially insulting when the Obama administration, which had nearly doubled the federal deficit, had the audacity to decide — by executive fiat, without Congress — that state and local governments across the nation needed to pay some state employees more. That was easy enough to say for a president in the waning days of his administration, thousands of miles away, who didn’t have to pony up the money. But for state and local governments forced to square their budgets with this new unfunded federal mandate, the hard question was: Where would that money come from? Which state programs would need to be trimmed or cut? Would we simply be compelled to lay off workers?
Most of us know that federal law requires overtime pay for work in excess of 40 hours a week. Less known is that this same law also exempts all “bona fide executive, administrative or professional” employees from this requirement. That has been the rule for more than 70 years. But three years ago, President Barack Obama ordered the Department of Labor to “revise” this so-called “white-collar” overtime exception. It did just that — by more than doubling the minimum salary cutoff for an overtime exception.
This defied Congress, which requires an overtime exemption for certain workers. The Obama administration unilaterally eliminated this exemption by engineering it to apply only after salaries exceed a high new level.
Worse, the rule automatically raised that high minimum salary every three years, which would ratchet-up the salary threshold long after Obama departed the Oval Office.
This unlawful rule was another attempt at a presidential end-run around the political process at great cost to the Constitution, the states and our economy. The rule threatened far-reaching harm to private and public employers alike. Government and private employers would have suddenly been mandated to provide overtime pay to more than 4 million previously salaried employees, costing the economy more than $1 billion in the first year alone — and leaving many workers without their jobs. State and local governments — and their taxpayers — would have needed to swallow an estimated $100 million increase in labor expenses. Or lay off employees. Labor-intensive industries, such as Nevada’s tourism economy, would have been hit particularly hard — small businesses the worst.
That’s why this time last year, I led a coalition of 21 states in challenging this disastrous, late-term specimen of federal overreach. Lawyers in my office fought the rule in federal court, and a District Court judge stopped the rule just days before it was scheduled to go into effect last December. Since that time, my office has been busy protecting that decision. Then on Aug. 31, our efforts were again rewarded: The federal court permanently invalidated the rule.
Meanwhile, the current federal administration has announced that it plans to revisit the Department of Labor’s overtime rule. It is widely expected to issue a rule that will more carefully balance the needs of employees with the needs of small businesses and government employers. No doubt, guided by the federal court decisions that my office obtained, the Department of Labor will also seek to more faithfully hew to the actual text and requirements of the governing federal statutes.
Not every effort to protect our great State of Nevada against federal overreach or other unlawful influence is appropriately rewarded. But it is nice when it is.
Adam Paul Laxalt, a Republican, is Nevada’s attorney general.