October 13, 2016
Carson City, NV – Last night, Nevada Attorney General Adam Paul Laxalt filed a Motion for Preliminary Injunction and Request for Expedited Consideration on behalf of a coalition of 21 states in Nevada’s federal lawsuit challenging the United States Department of Labor’s new overtime rule. AG Laxalt’s motion requests that a federal court enjoin the new overtime rule before it takes effect on December 1, 2016. In it, AG Laxalt argues that the rule not only violates the Constitution, but also exceeds federal statutory authority and conflicts with the Administrative Procedures Act. Nevada’s request for a preliminary injunction follows on the heels of a lawsuit brought late last month outlining these arguments.
“The overtime rule is the latest in a series of unlawful, overreaching and unilateral actions taken by President Obama’s administration,” said Attorney General Laxalt. “An unaccountable federal agency has once again acted with no authorization from Congress. Indeed, in this case, the Department of Labor’s action is in direct conflict with federal law. The new overtime rule will unquestionably impact both state and private budgets across our nation, which is why I am proud to have taken the lead to stop this rule before its December implementation.”
If allowed to take effect in December, the new overtime rule will affect private and public employers equally. Labor-intensive industries, like Nevada’s tourism economy, will be hit particularly hard—small businesses the worst. The new rule would more than double the minimum salary cutoff under which employers must pay overtime to their employees. It will also force state and local governments and small businesses to substantially increase their employment costs at the expense of their budgets and services. The rule will also likely lead some employees to be reclassified as hourly workers with the potential of reduced hours and pay. Public and private sector layoffs may even be necessary. Thousands of state and local employees across the country will be affected by the new rule, impacting virtually every state and local government budget in the country.
As background, on March 13, 2014, President Obama issued a directive to the Department of Labor ordering the revision of the Fair Labor Standards Act’s overtime exemption for executive, administrative and professional employees—the so-called “white collar” exemption. On May 23, 2016, the Department of Labor issued the final new overtime rule. It doubles the minimum salary that must be satisfied before an employee is exempt from overtime, regardless of whether they perform executive, administrative or professional duties. After December 1, 2016, all employees are entitled to overtime if they earn less than $913 a week—including state and local government employees. Additionally, the new rule contains a mechanism to automatically increase the salary-level every three years without going through the standard rule-making process required by federal law.
In addition to Nevada, other states who joined this filing include: Alabama, Arizona, Arkansas, Georgia, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Michigan, Mississippi, Nebraska, New Mexico, Ohio, Oklahoma, South Carolina, Texas, Utah and Wisconsin.
AG Adam Laxalt, Lawrence VanDyke, Nevada’s Solicitor General, Jordan Smith, Assistant Solicitor General, and Steven Shevorski, Head of Complex Litigation, represent the coalition of 21 states.
To view the filed Motion for Preliminary Injunction, click here.