Officials from 21 states sued the U.S. Department of Labor over the Fair Labor Standard Act (“FLSA”) Overtime Rule that would make about 4 million higher-earning workers eligible for overtime pay. Nevada Attorney General Adam Laxalt filed the lawsuit in the U.S. District Court in Eastern Texas, urging a block on the implementation of the rule before it takes effect on December 1, 2016. Other plaintiffs include Alabama, Arizona, Georgia, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Michigan, Mississippi, Nebraska, Nevada, New Mexico, Ohio, Oklahoma, South Carolina, Texas, Utah and Wisconsin.
Over 50 business groups, including the US Chamber of Commerce and the National Association of Manufacturers, have filed a similar lawsuit on the same day and in the same court. This lawsuit alleges, among other things, that the new rule disregards the mandate of Congress to exempt white-collar employees from the overtime requirements of the FLSA.
Opponents of the rule claim it would burden private and public sectors by straining budgets and forcing layoffs or cuts in working hours. The measure would more than double the salary threshold under which employers must pay overtime to their white collar workers. Overtime protections would apply to workers who make up to $913 a week, or $47,476 a year, and the threshold would readjust every three years to reflect changes in average wages.
Because it is still too early to determine what the outcome of these cases will be, companies should proceed as though the new rules will take effect on December 1, 2016, as scheduled.