Client Alert – 21 States File Suit Challenging the DOL's New Overtime Rule

September 22, 2016

On September 20, 2016 a group of 21 states filed a lawsuit in the United States District Court for the Eastern District of Texas challenging the Department of Labor’s (DOL) new overtime rule, which is set to take effect on December 1, 2016.

As most know by now, in May 2016, the DOL issued its final rule establishing a new minimum salary threshold for the white collar exemptions under the Fair Labor Standards Act (FLSA). This new threshold of $913 per week ($47,476 annualized) more than doubles the current minimum weekly salary threshold of $455 per week ($23,660 annualized), and is scheduled to increase every three years. The crux of the states’ claim is that the new rule will force many businesses, including state and local governments, to unfairly and substantially increase their employment costs. Because this lawsuit is far from certain to succeed, we encourage employers to continue preparing to comply with the new rules by December 1. We will continue to follow this case for you and provide updates as new developments arise.

Please contact SESCO should you have any questions. For assistance, contact us at 423-764-4127 or by email at sesco@sescomgt.com.