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Published on Friday, September 30, 2016

New overtime rule faces legal challenge

In September, over 50 business groups and 21 states filed lawsuits challenging the U.S. Department of Labor’s new Federal Labor Standards Act (FLSA) overtime rule, which applies to public and private sector employers. The new rule, set to go into effect on December 1, would double the minimum salary threshold under which an employee is entitled to overtime pay to $47,500. In the first year of the new rule alone, the Department estimates that over four million additional workers would be entitled to overtime pay. The current threshold is $23,660.

The lawsuit seeks a temporary and permanent injunction to block implementation of the rule on several grounds, including that it violates the U.S. Constitution. The states’ complaint, filed in Texas, is available here.

In addition to the lawsuits, legislative efforts are underway to delay or block the rule from going into effect. A bill to delay the rule’s effective date for six months passed the U.S. House of Representatives on September 28, and an Oregon lawmaker introduced a proposal to implement a three-year phase-in of the new salary threshold and also eliminate the automatic increases.

Despite these efforts, cities should assume the new rules will take effect on December 1. To help you plan for the changes, AWC is offering a FLSA updates webinar on Wednesday, October 12 at 10 am. AWC members can register for free here.

Categories: Personnel