In September, I wrote that Georgia’s decision to join a
21-state lawsuit opposing the U.S. Department of Labor’s proposed
overtime rule was based on its concern that making more state employees
eligible for overtime would have a significant effect on Georgia’s budget.
On November 22, 2016, Federal Judge Amos Mazzant issued
an injunction preventing the December 1, 2016, implementation of the rule.
Interestingly, Judge Mazzant ruled against the argument
put forward by Georgia that “FLSA’s overtime requirements violate the
Constitution by regulating the States and coercing them to adopt wage policy
choices that adversely affect the States’ priorities, budgets, and services.”
Instead he found that the Fair Labor Standards Act did
apply to states.
The judge issued the nationwide injunction after finding
that the “Department exceeds its delegated authority and ignores Congress’s
intent by raising the minimum salary level such that it supplants the duties
test.”
Under FLSA, employees who may be exempt from the overtime
provisions of the FLSA must meet both a “duties test” to determine whether they
perform duties of an executive, administrative, or professional manner, and a
salary test.
In his decision, Judge Mazzant writes: “it is clear
Congress intended the EAP exemption to apply to employees doing actual executive,
administrative, and professional duties. In other words, Congress defined the
EAP exemption with regard to duties, which does not include a minimum salary
level.”
It is now up to the Labor Department to decide whether
they wish to appeal the District Court’s ruling to the Fifth Circuit Court of
Appeals located in New Orleans.
Complicating this matter is the upcoming change in
administrations. Given the time constraints, any appeal to the Circuit Court of Appeals,
and perhaps later to the Supreme Court, would have to be handled by the
incoming administration; and it is unclear whether the new administration would
be willing to undertake such an appeal.
In the meantime, Georgia is no longer required to
reclassify state employees who would have become nonexempt under the proposed
rule, and they do not have to raise their budget to cover the additional costs
that might have been incurred with the rule change.
