21 States File Challenge Against the Department of Labor’s Overtime Rule

Today, a coalition of 21 States led by the attorneys general of Texas and Nevada filed a challenge to the Department of Labor’s Overtime Rule. Under the new regulation, the number of white collar workers eligible for overtime compensation would be increased by moving the salary threshold from less than $455 a week ($23,660 annually), to less than $913 a week ($47,476 annually). The rule also establishes an indexing mechanism that will update the eligibility level every three years, beginning January 1, 2020.

The States’ lawsuit argues the rule ignores the requirements set forth under the Fair Labor Standards Act’s overtime exemption by increasing the salary level, regardless of whether an employee is actually performing “bona fide executive, administrative, or professional” duties. The complaint also describes the automatic indexing provision of the rule as an evasion of the notice and comment requirements of the Administrative Procedures Act and statutory requirements to update the exemption “from time to time.”

Furthermore, the States argue the new overtime rule violates the Tenth Amendment by infringing on state sovereignty and federalism by determining wages the states must pay to employees, what hours employees will work, and how they will be compensated when called upon to work overtime. States would thus be required to allocate a portion of their budgets to fulfill the new mandate from the federal government, or to alter or eliminate employment and services to comply with the new regulation.

The complaint was filed with the US District Court for the Eastern District of Texas and requests a declaratory and injunctive relief from the rule. Joining Nevada and Texas in the lawsuit are Alabama, Arizona, Arkansas, Georgia, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Michigan, Mississippi, Nebraska, New Mexico, Ohio, Oklahoma, South Carolina, Utah, and Wisconsin.

A copy of the complaint can be found here – http://tinyurl.com/overtime-rule-complaint