On Wednesday, September 20, two separate cases were filed to stop the implementation of the final overtime rule changes.
Twenty-one states have joined together to file suit against the Department of Labor. In their challenge, they argue that the DOL erred by elevating the salary threshold over the duties test in defining an exempt vs. non-exempt employee. The states also take umbrage at the automatic update provision which do not take into account the effects on the public and private sectors. Finally, the challenge asserts the DOL exceeded its constitutional authorization by forcing states to adhere to federal regulation which results in the depletion of state funds. The 21 states are Alabama, Arizona, Arkansas, Georgia, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Michigan, Mississippi, Nebraska, Nevada, New Mexico, Ohio, Oklahoma, South Carolina, Texas, Utah and Wisconsin.
In a separate action, the US Chamber of Commerce, the American Society of Association Executives, Texas Association of Business, National Automobile Dealers Association, the National Association of Manufacturers, National Association of Wholesaler Distributors, National Federation of Independent Business, National Retail Federation and more than 50 other national and Texas business groups, filed a legal challenge, arguing that the DOL exceeded its statutory authority in issuing the regulation and violated the Administrative Procedure Act. Specifically, the suit challenges the excessively high salary threshold, lack of acknowledgement of regional and industry differences and automatic update provisions.
The final overtime rules are slated to take effect December 1. Stay tuned for the impact of these challenges!