States Wage Legal Battle Over New Overtime Rules

CARSON CITY, Nev. — State officials are taking the U.S. Department of Labor to court over new federal overtime rules.

Nevada Attorney General Adam Laxalt, a Republican, filed the lawsuit in U.S. District Court in Eastern Texas, urging it to block implementation before the regulation takes effect on Dec. 1. Nevada is joined by 20 other states in the challenge.

The Obama Administration unveiled the new rules in May. The most notable change announced will be a nearly doubling of the current salary threshold from its current $23,360 to $47,476, under which virtually all workers will be eligible for time-and-a-half pay. This change would make nearly five million currently exempt employees eligible nationwide. 

Under the new rule, states are still empowered to enact their own statutes that differ from the new federal regulations. However, businesses are subject to whichever requirements are more generous to employees.

According to Laxalt, the rule will force state and local governments, as well as small businesses, to substantially increase their employment costs at the expense of their budgets and services. 

The rule will also likely lead some employees to be reclassified as hourly workers with the potential of reduced hours and pay. Public and private sector layoffs may even be necessary, he added.

"The Department of Labor's new overtime rule is the latest in a series of unlawful, overreaching and unilateral actions taken by President Obama's administration," Laxalt said. "Longstanding federal law requires an overtime exemption for 'bona fide executive, administrative, or professional' employees. Ignoring this federal law, the Department of Labor by executive fiat is forcing state, local and private employers to pay overtime to any employee who earns under a certain amount, regardless of whether that employee is actually performing 'executive, administrative, or professional' duties."

He added the rule will also "automatically increase the salary cutoff every three years, ensuring that its pernicious effects last long after this president leaves office in a few months."

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

To read the complaint, click here.

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