Nevada, 20 other states challenge Obama’s new overtime rules

CARSON CITY — A lawsuit filed Tuesday by Nevada Attorney General Adam Laxalt and joined by 20 other states challenges the legality of new overtime rules implemented by the Obama administration and set to take effect Dec. 1.

The lawsuit, filed in the Eastern District of Texas, argues the rule the Labor Department implemented is unconstitutional because it dictates wages states must pay employees for government functions and exceeds congressional authority.

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

“Long-standing federal law requires an overtime exemption for ‘bona fide executive, administrative or professional’ employees,” Laxalt said in statement.

He said the federal government “is forcing state, local and private employers to pay overtime to any employee who earns under a certain amount.”

The new regulation entitles employees who earn up to $47,476 annually to receive overtime compensation. The threshold is roughly double the current benchmark and would be adjusted every three years — meaning more workers will qualify for overtime pay.

On its website, the Labor Department said the change will automatically extend overtime pay provisions to more than 4 million workers in the first year of implementation.

“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.

Laxalt said the move “tramples on state and local government budgets, forcing states to shift money from other important programs to balance their budgets, including programs intended to protect the very families that purportedly benefit from such federal overreach.”

Representatives of the Nevada resort industry, small businesses and chambers of commerce echoed Laxalt’s concerns in comments included in his press release.

“By nearly doubling the threshold amount for exempt employees, the regulation results in abrupt increases, taxes and labor costs,” the Nevada Resort Association said.

Randi Thompson, state director of the National Federation of Independent Businesses, said the changes amount to “cruel and unusual punishment” when small businesses are “gearing up for the make-or-break holiday season.”

Kristin McMillan, president of the Las Vegas Chamber of Commerce, said many employers will be unable to meet the mandates and will be forced to curtail hiring or lay off workers.

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.

Contact Sandra Chereb at schereb@reviewjournal.com or 775-461-3821. Follow @SandraChereb on Twitter.