The lawsuit was ‌filed in the Trenton, New Jersey, federal court by the National Retail Federation, the American Hotel & Lodging Association, the International Franchise Association and the Restaurant Law Center, which represents the food ​service industry.

It challenged a law signed in June by Governor Mikie Sherrill, ​who has said the fees could raise $145 million a year.

Sherrill's office ⁠did not immediately respond to a request for comment.

The defendants include Aaron Binder, ​the state's treasurer, and Kevin Jarvis, the acting commissioner of the state's Department of ​Labor and Workforce Development. Their offices did not immediately respond to requests for comment.

Sherrill and some lawmakers view the fees as a way to cope with a potential decline in federal ​health care funding, and help pay for Medicaid for lower-income adults and children.

Opponents ​have called such fees a tax and say they could discourage hiring. California has considered similar ‌fees.

New ⁠Jersey's law imposes annual fees for each employee and employee's dependent of $325 for employers with 50 to 249 Medicaid beneficiaries, $525 for employers with 250 to 499 beneficiaries, and $725 for employers with 500 or more beneficiaries.

According to the complaint, the law conflicts ​with the federal framework ​governing employer-sponsored health ⁠benefit plans and is preempted by the federal Employee Retirement Income Security Act of 1974, known as ERISA.

The complaint also ​said New Jersey's law violates constitutional due process by imposing ​fees without ⁠giving employers a fair chance to contest them, and federal privacy laws because employers won't know whether employees and dependents are enrolled in Medicaid without asking.

“This law amounts ⁠to a ​penalty on employers [and] makes New Jersey a more ​difficult place to do business," said David French, executive vice president of government relations at the National ​Retail Federation, the largest U.S. retail trade group.