• Workforce



Governor Terry E. Branstad « Lt. Governor Kim Reynolds

FOR IMMEDIATE RELEASE: Tuesday, September 20, 2016
Contact: Governor’s Office 515-281-5211

(DES MOINES) – Today, Governor Branstad joined a coalition of 21 states and governors in filing a federal court complaint challenging the United States Department of Labor’s new overtime rule.  If implemented the new rule will more than double the minimum salary overtime threshold for public and private workers without Congressional authorization.  The rule will force many state and local governments to substantially increase their employment costs and services, including educational costs for students and parents.  Some governments may be forced to eliminate some services and even lay-off employees.  The complaint urges the court to prevent the implementation of the new rule before it takes effect, which is scheduled for December 1, 2016.

“The proposed rule would add $19.1 million of additional costs on the State of Iowa government and our public universities in the first year – a burden that would be carried by Iowa’s hard working taxpayers, parents and students,” Branstad said in comments submitted on the draft rule.  “Quite simply, the proposed rule would be an unfunded mandate upon states.”

On March 13, 2014, President Obama ordered the Department of Labor to revise the Fair Labor Standards Act’s overtime exemption for executive, administrative, and professional employees—the so-called “white collar” exemption—to account for the federal minimum wage.  On May 23, 2016, the Department of Labor issued the final new overtime rule.  It doubles the salary-level threshold for employees to be exempt from overtime, regardless of whether they perform executive, administrative, or professional duties.  After December 1, 2016, all employees are entitled to overtime if they earn less than $913 a week—including state and local government employees.  Additionally, the new rule contains a ratcheting mechanism to automatically increase the salary-level every three years without going through the standard rule-making process required by federal law.  Unfortunately, the U.S. Department of Labor did not significantly address the State of Iowa’s concerns in the final rule and significant concerns remain about the rule’s impact on Iowa taxpayers and our institutions of higher education.

In addition to Iowa, other states and governors who joined this filing include: Alabama, Arizona, Arkansas, Georgia, Indiana, Kansas, Kentucky, Louisiana, Maine, Michigan, Mississippi, Nebraska, Nevada, New Mexico, Ohio, Oklahoma, South Carolina, Texas, Utah and Wisconsin.

The filed complaint can be read in its entirety here.

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