Overtime Rule Target of Lawsuit by 21 States
Author: Michael Cardman, XpertHR Legal Editor
September 20, 2016
Several states today filed a lawsuit asking a federal court to nullify new Fair Labor Standards Act (FLSA) overtime regulations from the US Department of Labor (DOL) before they take effect December 1.
The lawsuit claims that the DOL's regulations run counter to the FLSA statute, congressional intent and "common sense" because they relegate "the type of work actually performed to a secondary consideration while dangerously using the 'salary basis test,' unencumbered by limiting principles, as the exclusive test for determining overtime eligibility for [executive, administrative and professional] employees."
The lawsuit also alleges that a provision in the new regulations that will automatically adjust the minimum salary level for overtime-exempt employees every three years to account for inflation violates a provision in the FLSA statute that limits DOL to issuing regulations on overtime exemptions only "from time to time."
Officials representing Alabama, Arizona, Arkansas, Georgia, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Michigan, Mississippi, Nebraska, New Mexico, Ohio, Oklahoma, South Carolina, Texas, Utah and Wisconsin filed the lawsuit in the US District Court for the Eastern District of Texas, which is considered a friendly venue for plaintiffs seeking to overturn regulations from the Obama administration.
Unless it is overturned, the new overtime regulations "may lead to disastrous consequences for our economy," Texas Attorney General Ken Paxton said in a statement.
"We are confident in the legality of all aspects of our final overtime rule," US Labor Secretary Thomas E. Perez said in a statement emailed to XpertHR. "It is the result of a comprehensive, inclusive rule-making process. Despite the sound legal and policy footing on which the rule is constructed, the same interests that have stood in the way of middle-class Americans getting paid when they work extra are continuing their obstructionist tactics."