The Department of Labor (DOL) has announced a new regulation that increases the salary threshold for paid overtime from less than $455 per week to $913 per week. Currently, salaried workers are only entitled to overtime pay if they make less than $23,660 annually.
Employees who earn yearly salaries of $47,476 or less will be entitled to overtime pay if they work more than 40 hours a week. The new rule takes effect December 1, 2016, after that, companies will be watched and audited to make sure they are in compliance.
The Obama administration also took the step of ensuring the threshold will be updated automatically, every three years, by indexing it to salary growth in the lowest income region of the country. Also for the first time, the rule will allow bonuses and incentive payments to count toward up to 10-percent of the new salary level.
This new Labor Department policy should be challenged because the Executive branch, to which the DOL belongs, does not have the power to create employee compensation regulations. And while the federal government has often usurped powers not delegated to it via the Legislative branch, in this case, Congress did not pass any legislation expanding the conditions under which employers would be required to pay overtime to their employees.
This new rule came after a memorandum from Obama directing it to do so. Therefore, instead of executing a law passed by Congress, the president effectively legislated by executive memorandum.
Obama took this action despite the fact that the Constitution mandates that all legislative power be vested in the Congress as directed in the 10th Amendment, which reads: “The powers not delegated to the United States [i.e., the federal government] by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”
Reading through the Constitution from beginning to end, no language is found that even remotely suggests that any branch of the federal government has the power to regulate salaries or any other part of the relationship between the employer and employee. That authority’s reserved to the states and to the people.
Shame on Congress for failing to act against such tyranny.