On September 20, 2016, business groups and states filed two lawsuits in the U.S. District Court for the Eastern District of Texas challenging President Obama’s new overtime rule that is set to take effect December 1, 2016 . Twenty-one states banded together to challenge the U.S. Department of Labor’s (“DOL”) new overtime exemption rule in States of Nevada et al. v. United States Department of Labor et al, Case No. 1:16-cv-004070., and the U.S. Chamber of Commerce, leading a coalition of 50 national and Texas business groups, filed a similar lawsuit in Plano Chamber of Commerce et al. v. Thomas Perez et al. Case No. 4:16-cv-00732. The two lawsuits argue that DOL unconstitutionally overstepped its authority to establish a federal minimum salary level to qualify for the Fair Labor Standards Act’s (“FLSA”) white collar exemption and violated the Administrative Procedure Act (“APA”).
The New Rule & its Impact on Employers
The long awaited controversial rule was released in May 2016 to the disdain of employers, as we’ve explained in prior blog posts. The most significant change in the final rule is the new $47,476.00 minimum threshold salary required to qualify as an exempt employee, representing more than a 100% increase from the present level and a huge financial undertaking for employers. All employers throughout Continue reading