Unlike the federal government, states like Nevada must actually balance their budgets. That means our officials need to make hard choices on spending priorities.
Take state-employee pay, for example. State payroll has to be carefully weighed against many other spending priorities, and sometimes excruciating budgetary decisions have to be made. While these decisions are never easy, what should be easy to see is who should make them: state officials locally elected by the people of Nevada who are actually footing the bill.
But for state and local governments that now have to adjust their budgets to account for an unfunded federal mandate, the hard question is: Where will the money come from? Which state programs will need to be trimmed or cut? Which Peter will have to be robbed to pay Paul?
Federal law requires overtime pay for work over 40 hours a week. This same law also exempts “bona fide executive, administrative, or professional” employees from the overtime requirement. Two years ago, President Obama ordered the federal Department of Labor to “revise” this so-called white-collar overtime exception. Now the department has done just that — by more than doubling the minimum-salary cutoff for overtime pay and instituting a new indexing mechanism that automatically ratchets it up every three years without going through the process required by federal law.
This new, unlawful rule accomplishes another presidential end run around the political process, at great cost to the Constitution, the states, and private industry. If allowed to take effect in December, the rule will affect private and public employers equally.
Preliminary estimates suggest that between 4 to 11 percent of public and private-sector employees could be affected, costing businesses and governments tens of millions of dollars each year. Labor-intensive industries, like Nevada’s tourism economy, will be hit particularly hard — small businesses the worst.
Thousands of state and local employees across the country will likewise be affected by the new rule, harming virtually every state and local-government budget in the country. State governments have estimated that anywhere from 500 to thousands of government workers will be impacted in each state, with a resultant strain on budgets estimated to be in the millions of dollars for many states. In Iowa alone, the new rule is expected to cost the state an additional $19.1 million.
I challenged the president before when he sought to unilaterally change federal law to mean something other than what Congress intended it to mean. Now I am doing so again, leading a coalition of 21 states composed of both governors and state attorneys general.
Federal law — the statute that Congress passed — authorizes neither a new salary threshold untethered from the actual type of work performed nor the new rule’s ratcheting mechanism. On this latter point, the federal Department of Labor actually agrees with me (or at least it did once).
In what would be an astonishing admission for any other administration, that agency has conceded that the statutory law does not permit the agency alone to engage in automatic updating. Yet “these changes,” the Labor Department writes, “were all made without specific Congressional authorization.”
That’s why I’m leading a coalition of states that has just filed suit to stop the implementation of this new overtime rule. Without this action, the damage to our constitutional system and economy will last far longer than the few remaining months of this president’s term.
— Adam Laxalt is the attorney general of Nevada.