News & Insights

Breaking: Indiana and Michigan Join 19 Other States in Fight Against DOL’s New Overtime Rule
September 21, 2016
by Brett Hummer

 

South Bend / Mishawaka – On September 20, 2016, twenty-one (21) states, including Indiana and Michigan, filed suit in the U.S. District Court for the Eastern District of Texas in what appears to be a last ditch effort to bring to a halt the U.S. Department of Labor’s (“DOL”) new overtime rule.  We previously wrote about the DOL’s Final Overtime Rule when it came out in May of this year here:

http://maylorber.com/insights/brace-yourselves-employers-dols-final-overtime-rule-is-upon-us/

The challenging states, led by Nevada and Texas, contend in the lawsuit that the DOL exceeded its rulemaking authority by raising the salary threshold at which employees must be paid in order to maintain exempt status under the Fair Labor Standards Act (“FLSA”).  Under the DOL’s Final Rule, the new salary level for executive, administrative, and professional “white-collar” exemptions from the FLSA’s overtime requirements is pegged at $913/week or $47,476 annually, a significant increase from the current salary level.

The plaintiff-states in the lawsuit argue that the increased salary threshold will burden businesses, including state and local governments, by significantly increasing employee payroll costs.  The states leading the challenge are asking the Eastern Texas Federal Court for a declaratory judgment that would find the DOL’s Final Rule in violation of the Tenth Amendment by requiring how state employees are paid.  The states bringing this suit also argue that the DOL disregarded the plain language of the FLSA itself by imposing the new salary level without considering whether employees are, in fact, performing bona fide exempt duties.

Despite this lawsuit, the DOL’s changes to the “white-collar” exemptions under the Fair Labor Standards Act (“FLSA”) are still set to go into effect December 1, 2016.  Accordingly, employers should continue readying themselves to comply with the DOL’s new rules by the December 1, 2016 effective date.

The states challenging the DOL in this lawsuit are Alabama, Arizona, Arkansas, Georgia, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Michigan, Mississippi, Nebraska, Nevada, New Mexico, Ohio, Oklahoma, South Carolina, Texas, Utah, and Wisconsin.  The case is entitled, Nevada, et al. v. U.S. Department of Labor, et al., Case Number 1:16-cv-00407.

May Oberfell Lorber’s Labor & Employment team will continue to monitor this lawsuit and keep employers apprised of developments in this case.

The content of this article is for informational purposes only, and does not contain, nor should be construed as containing, legal advice.

 

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