Final Overtime Rule Challenged in Federal Court

Employment Law

This week, a coalition of 21 states' attorney generals and a group of business associations filed two separate lawsuits arguing the Labor Department overstepped its legal authority by imposing an exceedingly large increase in the salary level threshold for the FLSA white collar overtime exemption and automatically indexing the increase every three years.  The state challenge, led by Texas and Nevada, argues the final rule "infringes on state sovereignty and federalism" by dictating the wages that each state must pay to its employees, and could force governments to cut services or lay off employees.  Both challenges also contend the automatic indexing of the salary level threshold is unprecedented, and that DOL itself has previously said it does not have "specific congressional authorization" to mandate indexing through regulation.  Separately, Reps. Tim Walberg (R-MI) and John Kline (R-MN), introduced legislation (H.R. 6094) that would delay the implementation date by six months from December 1, 2016, to June 1, 2017.  Although President Obama is unlikely to sign such a bill, there is a slightly better chance the courts could delay the rule, especially given the number of states involved in the litigation.