By Sara J. Ackermann
September 22, 2016
On September 20, 2016, two lawsuits were filed in an attempt to block the DOL’s proposed overtime rule (the “Rule”). Wisconsin joined 20 other states in filing one suit while the U.S. Chamber of Commerce along with 50 other business groups filed the other. Both suits, filed in the U.S. District Court for the Eastern District of Texas, are an attempt to block the Rule by raising a multitude of challenges, including the argument that the DOL has exceeded its statutory authority in violation of the Administrative Procedure Act and violated the 10th Amendment as the Rule is applied to state workers.
The Rule, which is set to take effect on December 1, would raise the minimum salary threshold required to qualify for the Fair Labor Standards Act’s so-called white collar exemption to $47,476 per year, more than double the current threshold of $23,660. (See previous legal update regarding the Rule Today the DOL Announced its Long-awaited Final Rule!)
In response to the lawsuits, U.S. Secretary of Labor Thomas E. Perez made it clear the DOL was not backing down, stating, “We are confident in the legality of all aspects of our final overtime rule. It is the result of a comprehensive, inclusive rulemaking process. Despite the sound legal and policy footing on which the rule is constructed, the same interests that have stood in the way of middle-class Americans getting paid when they work extra are continuing their obstructionist tactics. Partisan lawsuits filed today by 21 states and the U.S. Chamber of Commerce seek to prevent the Obama administration from making sure a long day’s work is rewarded with fair pay. … I look forward to vigorously defending our efforts to give more hardworking people a meaningful chance to get by.”
These recent lawsuits are not the only attempt to thwart the Rule. Also this week, a bill, (H.R. 6094), was introduced in the House of Representatives that would provide for a 6-month delay in the effective date of the Rule. Also pending in the House is the proposed Overtime Reform and Enhancement Act, (H.R. 5813), that would direct the DOL to revise the Rule so the increase in pay would increase incrementally over the next 4 years, i.e., $35,984 for 2016, $39,7820 in 2017, $43,628 for 2018, with the proposed $47,476 salary threshold not effective until 2019.
Bottom Line: While there is pending litigation and legislation that could change the Rule, as of right now, the proposed Rule is still set to go into effect on December 1, 2016. We will continue to keep you apprised as to the progress of the lawsuit and any Congressional action. In the meantime, for more information regarding the Rule and how to prepare your company, contact any member of our Employment Law team.
This document provides information of a general nature regarding legislative or other legal developments, and is based on the state of the law at the time of the original publication of this article. None of the information contained herein is intended as legal advice or opinion relative to specific matters, facts, situations, or issues, and additional facts and information or future developments may affect the subjects addressed. You should not act upon the information in this document without discussing your specific situation with legal counsel.
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