Today, Nevada attorney general Adam Laxalt announced his filing of the first state-led lawsuit against the U.S. Department of Labor’s new overtime rule, in what could prove a major blow to one of President Obama’s signature policies. Laxalt, in partnership with 20 other state attorneys general and governors, wants to halt the policy’s December 1 implementation date because the new rule, he argues, is an unconstitutional attempt by the Obama administration to “dictate how state and local governments allocate their budgets and provide service to their citizens and constituents.”
The new rule forces both public- and private-sector employers to pay time-and-a-half overtime to any hourly employees earning less than $47,476 per year, nearly double the old threshold of $23,660. Employees earning less than the threshold but performing “executive, administrative, or professional” duties were previously exempt from the DOL’s overtime requirements, but the new rule mandates that they receive time-and-half pay for extra work, too. In so doing, it directly overrides the exemptions outlined by Congress in the Fair Labor Standards Act. In addition to modifying the threshold and eliminating the white-collar exemption, the Obama administration created an algorithmic method to automatically update the salary threshold every three years based on wage growth and other factors. Laxalt calls this algorithm “ratcheting,” and it is a significant component of his lawsuit.
“Not only do we think we have an unlawful rule, but this rule will ratchet upward automatically forever,” Laxalt tells National Review. “We do not believe that federal law allows this to go into effect.”
