Twenty-one States File Legal Challenge to Obama’s New Final Overtime Rule…Finally

I’ve been telling everyone for the past several months that, so far, there hasn’t been any legal challenges to the US Dept of Labor’s new “Final Rule” on overtime which is slated to go into effect at midnight on December 1, 2016.  However, that’s not the case now.

The overtime rules implemented by the Obama administration are scheduled to take effect Dec. 1. The regulation, which was finalized in May, makes anyone earning up to $47,476 a year, or roughly $913 a week, eligible for overtime pay — a dramatic increase over the $23,660 cutoff now.  But the lawsuit argues the rule is unconstitutional because it dictates wages that states must pay employees for government functions, according to the Review-Journal.

It also argues the change would upset the state budgeting process by requiring states to pay overtime to more employees.

“Longstanding federal law requires an overtime exemption for ‘bona fide executive, administrative or professional’ employees,” Nevada Attorney General Adam Laxalt (R) said in statement to the Review-Journal. He went on to say that the federal government “is forcing state, local and private employers to pay overtime to any employee who earns under a certain amount.”

The Department of Labor says the rule will extend overtime to more than 4 million workers in its first year.

“This long-awaited update will result in a meaningful boost to many workers’ wallets, and will go a long way toward realizing President Obama’s commitment to ensuring every worker is compensated fairly for their hard work,” the agency said, according to the Review-Journal.

Other states that joined in the suit are Alabama, Arizona, Arkansas, Georgia, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Michigan, Mississippi, Nebraska, New Mexico, Ohio, Oklahoma, South Carolina, Texas, Utah and Wisconsin.

On the surface of it, the new Final Rule would, in fact, have more employees eligible for overtime compensation.  But what I’ve found over the last several months…dealing directly with clients, law firms, accountancy firms and employers, is that there seems to be a large “negative” effect in the form of “reduced work hours”; reclassification of “salaried exempt”  employees to “non-exempt hourly” regardless of whether or not they were actually and correctly filling the work role of a bonafide “salaried exempt” worker.  And, the most dramatic effect so far has been to simply terminate personnel because employers believe they will not be able to afford paying their lowest “salaried exempt” employee $47,476.00 per year.

Many of us in labor law enforcement, have been perplexed over why US Dept of Labor’s Wage and Hour Division never ever considered “phasing in” this new Final Rule.  Whenever there has been a substantial increase in the minimum wage on a state by state basis, states will typically “phase in” annual increase “incrementally” until the final minimum wage is reached.  So, why US Dept of Labor and Obama administration chose not to do that in this case…is perplexing.

Also see:  http://wsau.com/news/articles/2016/sep/20/states-file-legal-challenge-to-obama-administration-overtime-pay-rule

Michigan Youth Employment – Child Labor Requirements

Youth Employment Standards Act 90 of 1978 defines a minor who is less than 18 years of age, including but not limited to employees, volunteers, independent contractors and performing artists.

Student Worker

Minors under 18 years of age must obtain a work permit or a written agreement or contract entered into between the employer and the governing school district, public school academy, or nonpublic before starting work. Work permits can be obtained from the issuing school officer (the chief administrator of a school district, intermediate school district, etc.) the minor attends or the school district where the minor will be employed. If the minor changes jobs, a new work permit is required for the new employer. A work permit may be revoked for poor academic performance. A work permit is required even if the minor is home/cyber/virtual/online schooled, does not attend school, or out-of-state resident.

Work permits are no longer available for bulk purchase from Michigan Center for Career & Technical Education; work permits are available for printing or download below.  Note: CA-6 work permits must be printed, front and back, on pink paper and CA-7 work permits must be printed, front and back, on yellow paper to be valid.

Youth Employment Forms Packet
Youth Employment Standards Rules
Standards for Issuance of Work Permits
Standards for Issuance of Work Permits Checklist
Legislative link to the Youth Employment Standards Act 90
CA-6 Work Permit (must be printed pink and front to back)
CA-7 Work Permit (must be printed yellow and front to back)

WHO NEEDS A WORK PERMIT (INCLUDING SUMMER)
Minors under the age of 18 cannot be employed or permitted to work, with or without pay, volunteer or independent contractor until the person, company, business, firm or corporation proposing to employ the minor obtains and keeps on file at minor’s place of employment a current and valid age and color appropriate work permit, which has been issued by an issuing officer of the school district, intermediate school district, public school academy or nonpublic school prior to starting work.
Compulsory School Attendance “…The law in Michigan governing co,pulsory attendance requires a parent, legal guardian, or other person having control or charge of a child…who was age eleven before that date and entered grade 6 in 2009 or later shall attend school from age six to eighteen…”

Whether minor is:

  • homeschool
  • cyber school
  • virtual school
  • online school,
  • obtaining G.E.D.
  • out-of-state resident
  • not attending school

Minors under the age of 18 are required to have a work permit prior to starting work.

If a minor comes from another state to work in Michigan, the minor should bring an official birth certificate and an unofficial transcript from the previous school attended which includes the school’s complete name, address, city, state, zip code, county and telephone number.

HOW TO OBTAIN WORK PERMIT

The minor first must go in person to a school district, intermediate school district, public school academy or nonpublic school official designated as an issuing officer and provide one of the following acceptable forms of evidence of age:

Minors seeking employment who are homeschooled shall be issued a work permit by the issuing officer of the school district, intermediate school district, public school academy, or nonpublic school in which the minor’s residence or prospective employer is located.  The minor must present a signed, written statement from the parent or guardian, as the instructor of record, indicating how many hours per week the student is being homeschooled.  The issuing officer will review the parent/guardian statement and issue the work permit with those hours reflected.  The issuing officer will attach the parent/guardian statement to the work permit and keep a copy of the statement with their copy of the work permit filed at the school.

  • A certified copy of birth record or other proof of age showing the place and date of birth
  • A certified copy of valid operator’s license issued by this state showing date of birth
  • The school record or the school census record
  • The sworn statement of minor’s parent/guardian and statement from physician

The minor and parent/guardian must complete Section I of the work permit in its entirety (all areas must be completed).

The minor then takes the work permit to the employer, after completing Section I, and the employer must complete Section II of the work permit, in its entirety (all areas must be completed including listing all work the minor will be performing, equipment and/or tools minor will use, starting and ending hours to be worked, number of days per week to be worked and number of hours per days to be worked, etc).

The minor must take the work permit, after the employer has completed Section II, in person to a school district, intermediate school district, public school academy or nonpublic school official designated issuing officer for review and to complete section III.

The issuing officer must copy the work permit and place the work permit in the minor’s permanent school file and return the original work permit to the minor.

The minor must give the original work permit (after the designated official issuing officer has reviewed and approved by signing and dating) to the person, company, business, firm or corporation prior to start of work which is kept on file at the minor’s place of employment.

HOW TO OBTAIN AN APPLICATION FOR PERFORMING ARTS AUTHORIZATION

An “Approved” Application for Performing Arts Authorization form is needed from this department for all minors between the ages of 15 days old to 17 years prior to any performance (modeling, live stage, dancing, singing, filming, taping, etc.).  The company, the payroll company that is paying the minors and the extras, and the production company must submit a current and valid workers’ compensation insurance certificate along with the Application for Performing Arts Authorization form for each minor at least 10 days prior to start date and time of rehearsal and performance to this office for processing.

The “Approved” Application for Performing Arts Authorization form is needed for each minor, written parent/guardian permission statement, and the “Posting Requirements” must kept on-site at minor’s place of employment/performance.  All records required by the Act 90 of 1978 must be maintained and made available for inspection by an authorized representative of the Department and the employment must be in compliance with all provisions of the Act.

Application for Performing Arts Authorization Form (2 pages)

Michigan Penal Code (Excerpt) Act 328 of 1931

When both federal and state laws apply the more stringent standard must be observed

Home Care Employees Now Covered Under FLSA

Homecare Royalty Free Stock PhotoU.S. Court of Appeals Unanimously Upheld DOL Rule, Opinion Effective as of Oct. 13, 2015

The Department of Labor issued the Home Care Final Rule to extend minimum wage and overtime protections to almost 2 million home care workers. The rule was challenged in federal court, but on August 21, 2015, a federal Court of Appeals issued a unanimous opinion affirming the validity of the Final Rule. This opinion upholding the Home Care Final Rule became effective on October 13, 2015, when the Court of Appeals issued its mandate. We continue to provide employers technical assistance for coming into compliance with the Rule. As with all of our enforcement actions, employers and workers can expect that we will strategically use our enforcement resources, including complaint-based and agency-initiated investigations, to achieve compliance with these new important protections.

Please see below for more details about the litigation and the Department’s non-enforcement policies.
U.S. Court of Appeals Unanimously Upheld DOL Rule, Opinion Effective as of Oct. 13, 2015

The Department of Labor issued the Home Care Final Rule to extend minimum wage and overtime protections to almost 2 million home care workers. We believe the Rule is the right policy—both for those employees, whose demanding work merits these fundamental wage guarantees, and for recipients of services, who deserve a stable and professional workforce allowing them to remain in their homes and communities. The Home Care Final Rule, issued on October 1, 2013, had an effective date of January 1, 2015.

The Department has led an unprecedented implementation program to help employers of home care workers prepare for FLSA compliance, including offering an extensive and individualized technical assistance program, providing a 15-month period before the effective date, and adopting a time-limited non-enforcement policy.

In June 2014, associations of home care companies filed a lawsuit in federal court challenging the Final Rule. In December 2014 and January 2015, U.S. District Court Judge Richard Leon issued opinions and orders vacating the Final Rule’s revised third party regulation and revised definition of companionship services, respectively.

The Department of Labor filed an appeal of the district court’s orders to the U.S. Court of Appeals for the District of Columbia Circuit. The case is Home Care Association of America v. Weil, No. 15-5018 (D.C. Cir.).On August 21, 2015, the Court of Appeals issued a unanimous opinion affirming the validity of the Final Rule and reversing the district court’s orders.

Because of the district court orders, the Department could not begin enforcement of the Final Rule on January 1, 2015, and because the Court of Appeals opinion did not take effect immediately, it could not begin enforcement on August 21, 2015, either. The home care associations asked the Court of Appeals and the Chief Justice of the U.S. Supreme Court to delay the date the Court of Appeals opinion would become effective, but both requests were denied. The Court of Appeals opinion reversing the district court’s orders became effective on October 13, 2015, when the Court of Appeals issued its mandate. The Department did not begin enforcement of the Final Rule until 30 days after that date, which means November 12, 2015. From November 12 through December 31, 2015, the Department was in the second phase of the time-limited non-enforcement policy it announced in October 2014, during which it exercised prosecutorial discretion in determining whether to bring enforcement actions, with particular consideration given to the extent to which States and other entities had made good faith efforts to bring their home care programs into compliance with the FLSA since the promulgation of the Final Rule.

As of January 1, 2016, we continue to provide employers technical assistance for coming into compliance with the Rule. As with all of our enforcement actions, employers and workers can expect that we willstrategically use our enforcement resources, including complaint-based and agency-initiated investigations, to achieve compliance with these new important protections.

August 21, 2015 U.S. Court of Appeals Decision (PDF)