Wednesday, September 28, 2016

Twenty-one States File a Legal Challenge Against the Federal Overtime Rule

Sara Rudow

Twenty-one states' attorneys general, the U.S. Chamber of Commerce, and more than 50 other national and Texas business groups filed a legal challenge on Tuesday, September 20th to the federal overtime rule set to take effect on December 1st. The new regulations revise the overtime exemptions for executive, administrative, and professional employees, commonly known as the “white collar” exemptions.

The group is arguing that the Department of Labor (DOL) exceeded its statutory authority in issuing the regulation and violated the Administrative Procedure Act, and holds that the rule will result in increased employment costs that could further impact services and workplace flexibility. The Chamber lawsuit also states that the rule departs from the intent of the Fair Labor Standards Act, that the salary threshold set by the rule is “excessively high,” and that it ignores regional and industry differences. The complaint argues that the salary threshold cannot be updated without a rulemaking process or further input from affected parties. The lawsuit was filed in the U.S. District Court for the Eastern District of Texas.

The full text of the final rule can be found here. For more information, including a memo from ACHA/NCAL’s legal consultant Jackson Lewis and other Department of Labor resources, see the AHCA/NCAL website under Workforce. Members will need their login information to access the memo and other resources.

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