The case is Nevada v. U.S. Department of Labor, 1:16-00407, U.S. District Court, Eastern District of Texas (Sherman). The federal government wants to raise the cutoff point to $47,476.
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The Labor Department couldn’t immediately be reached for comment Tuesday.
“The threat to States’ budgets and, consequently, the system of federalism, is palpable”, Paxton’s suit states.
Full-time executive, administrative and professional workers making less than $47,892 a year will be entitled to overtime pay starting December 1, according to a complaint filed Tuesday in federal court in Sherman, Texas.
The states in the lawsuit also threatened that they will reclassify some employees as hour and reduce their hours to avoid paying any overtime while also increasing the workload on those who remain exempt. The rule is set to take effect later this year.
On its website, the Department of Labor said the change will automatically extend overtime pay provisions to more than 4 million workers in the first year of implementation.
SC is expected to be especially affected by the change because salaries here tend to skew lower, and unlike places like California and NY, the state hasn’t raised the cutoff salary on its own.
Business groups, unions, economists and politicians are now debating whether that’s a good thing, winning the support of labor advocates but drawing opposition from business groups and some politicians. In increasing the overtime eligibility threshold (“without valid congressional authorization”, Paxton’s press release noted), the rule will force employers in both the private and public sectors to substantially increase employment costs – which could, in turn, lead to elimination of services or employee layoffs, he noted.
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“The federal overreach we continue to see is not a Republican vs. Democrat issue, which is demonstrated by the bipartisan coalition of states fighting this rule”, said Attorney General Brad Schimel in a statement. “Forcing these regulations on states is a violation of the 10th amendment and the rule of law”.
