States file legal challenge to Obama administration overtime pay rule

Reuters News
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Posted: Sep 20, 2016 1:31 PM

By Daniel Wiessner

(Reuters) - Officials from 21 U.S. states on Tuesday filed a lawsuit claiming an Obama administration rule to extend overtime pay to more than 4 million workers will place a heavy burden on state budgets.

The lawsuit filed in federal court in Sherman, Texas says under the rule, which is set to take effect Dec. 1, many state employees would become eligible for overtime pay even though they perform management duties that should make them exempt.

The rule would require employers to pay overtime to any salaried worker earning less than $47,500 a year, double the current threshold of $23,660. Business groups say the rule will force employers to demote salaried workers to hourly positions and create more part-time jobs.

The lawsuit was spearheaded by Texas Attorney General Ken Paxton and his counterpart in Nevada, Adam Laxalt. Other plaintiffs include the states of Michigan, Wisconsin, Georgia and Ohio, among others.

(Editing by David Gregorio)