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GOP-Led States Sue Labor Department on New 'Overtime Rule'

21 September 2016

The Labor Department failed to consider regional salary and economic differences in setting the nationwide base pay rate, and didn't consider whether all workers at this pay level should qualify as white-collar employees, according to the complaint.

It also argues the change would upset the state budgeting process by requiring states to pay overtime to more employees. As a result, none of the groups affected by the changes to the rule-workers, employers, governments, and the public in general-will have the ability to provide their input before the federal government imposes these changes.

Schmidt called the initiative part of a "cascade of unauthorized rules and regulations emerging from Washington in the final months of the Obama administration".

The rule is due to take effect December 1, a date implemented to give employers plenty of time to prepare, Department of Labor officials said at the time.

An alliance of 21 states is suing the United States Department of Labor for a new rule with which Labor would get a higher payout and stated that the overtime workers are eligible for this rule.

Other states joining the lawsuit are Alabama, Arizona, Arkansas, Georgia, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Michigan, Mississippi, Nebraska, Nevada, New Mexico, Ohio, Oklahoma, Texas, Utah and Wisconsin.

Attorney General Paxton said "Once again, President Obama is trying to unilaterally rewrite the law, And this time, it may lead to disastrous consequences for our economy".

The White House announced in May the new rules to take effect Dec 1. Previously, the Fair Labor Standards Act of 1938 guaranteed that anyone making a salary of $23,660 or less annually was entitled to overtime pay (at 1.5x time) for any hours beyond the 40-hour workweek.

Mark Abueg, a Justice Department spokesman, didn't immediately respond to phone and e-mail messages seeking comment on the complaint. Critics have expressed concerns that the mandate might force employers to convert salaried workers to hourly workers or perhaps create more part-time jobs.