Attorney General Ken Paxton on Tuesday led 21 states in suing the U.S. Labor Department over the new overtime rules in a federal district court in Texas.
Advertisement
The case, Nevada et al. v. U.S. Department of Labor et al, was filed in U.S. District Court for the Eastern District of Texas.
In the lawsuit, the states argue that the new policy “infringes upon state sovereignty and federalism by dictating the wages that States must pay to those whom they employ in order to carry out their governmental functions, what hours those persons will work, and what compensation will be provided where these employees may be called upon to work overtime”.
Earlier this year the department issued it’s new overtime rule that increased the minimum salary that must be met before before an employee is exempt from overtime.
The automatic indexing provision would adjust the salary thresholds for overtime exemption every three years starting January 1, 2020.
Indexed adjustments to the new salary minimums would be made every three years beginning on January 1, 2020.
The indexing provision of the new overtime rule is meant to prevent inflation-related erosion regarding coverage for workers so that regulators do not have to go back to the drawing board every few years.
U.S. Secretary of Labor Thomas Perez said in a statement Tuesday he expects the overtime rule to withstand legal scrutiny, dismissing the lawsuit as a partisan attempt to undermine the Obama administration’s labor policies.
Kentucky Governor Matt Bevin says the law would force private sector employers to layoff workers.
Vice President Joe Biden announced the new rule during a visit to Columbus in May.
“We believe that many employers across our state and the country_large and small alike_will not be able to meet the high cost of these ongoing rate changes, and as a result, will be forced to curtail hiring or even lay off employees”, said Kristin McMillan, president of the Las Vegas Metro Chamber of Commerce.
“It more than doubles the salary threshold for exempt employees overnight, and it will not only have a negative impact on business, but it will have a negative impact on the morale of the employees it will affect”, Moline told the community newsletter.
But advocates for the overtime overhaul were quick to criticize the lawsuit. The regulation raises the bar for exemption by doubling the baseline salary requirement and implementing a “duties test”.
Olens and other state attorneys general want a federal judge in Texas to overturn the new rule that would limit the so-called “white collar exemption”.
Advertisement
Attorney Alden Parker, regional managing partner for law firm Fisher Phillips in Sacramento, Calif., agreed that many restaurant operators will likely decide to convert salaried workers to hourly as a result of the new regulations.
