Officials from 21 states, including Indiana, sued the U.S. Department of Labor on Tuesday over a new rule that would make about 4 million higher-earning workers eligible for overtime pay, slamming the measure as inappropriate federal overreach by the Obama Administration.
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. Laxalt, a frequent critic of President Barack Obama's policies, said the rule would burden private and public sectors by straining budgets and forcing layoffs or cuts in working hours.
"This rule, pushed by distant bureaucrats in D.C., 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," he said in a written statement.
The lawsuit came the same day that the U.S. Chamber of Commerce and more than 50 other business groups filed a legal challenge against the regulation.
U.S. Secretary of Labor Thomas Perez said he was confident in the legality of the rule, describing the lawsuits as partisan, obstructionist tactics. He noted that overtime protections have receded over the years: they applied to 62 percent of full-time salaried workers in 1975 and just 7 percent today.
"The overtime rule is designed to restore the intent of the Fair Labor Standards Act, the crown jewel of worker protections in the United States," Perez said in a statement. "I look forward to vigorously defending our efforts to give more hardworking people a meaningful chance to get by."
The measure would shrink the so-called "white collar exemption" that exempts workers who perform "executive, administrative or professional" duties from overtime and minimum wage requirements.
It would more than double the salary threshold under which employers must pay overtime to their white collar workers. Overtime protections would apply to workers who make up to $913 a week, or $47,476 a year, and the threshold would readjust every three years to reflect changes in average wages.
"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 Labor Department said in May when it announced the new rule.
Business groups say the changes are too much and too fast, especially as states continue to recover from the recession.
"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.
Other plaintiffs include Alabama, Arizona, Arkansas, Georgia, Kansas, Kentucky, Louisiana, Michigan, Mississippi, Nebraska, Ohio, Oklahoma, South Carolina, Texas, Utah and Wisconsin, and the governors of Iowa, Maine and New Mexico.
The Eastern Texas district where the lawsuit was filed is known as a "rocket docket" court where cases move along quickly.