21 States Seek to Block New Overtime Regulations

Desperate to stop the Department of Labor (DOL) from raising the salary level test for white collar exempt employees, 21 states, led by Texas and Oklahoma, filed a legal action this week to block implementation of the agency’s new regulations.  While the lawsuit is likely as much about political differences between these states’ Attorneys General and the Obama Administration, it raises Constitutional issues, arguing that the 10th Amendment prohibits the federal government from dictating to the states how much they must pay their workers.  The lawsuit is likely to be rebuffed by the federal government, as more than 60 years of judicial precedent supports the federal government’s ability to set the salary level test for white collar exempt employees.  Whether a federal judge will temporarily stop implementation of the new rules will need to be closely watched.

In spite of the lawsuit, employers would be wise to continue to move forward as though the new salary level of $913/week (up from the current $455/week) will take effect December 1, 2016.  While there might be some potential that the automatic increase aspect of the new regulations will be overturned, it is not likely the regulations will be wholly overturned, particularly before December 1, though implementation may be temporarily delayed.


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