States and Business Groups Challenge Increase to FLSA Salary Threshold

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Twenty-one states and more than 50 business groups, in separate actions, have filed suit in the Eastern District of Texas seeking to enjoin implementation of the Department of Labor's (DOL) Final Rule increasing the salary threshold for the so-called "white collar" overtime exemptions under the Fair Labor Standards Act (FLSA).

The plaintiffs in both cases alleged that they employ individuals in positions currently classified as "exempt" from the FLSA's overtime requirements, whose current salaries are less than the $913 per week threshold in the new DOL Final Rule, which goes into effect December 1, 2016. The complaints request that the court set aside and enjoin the Final Rule, based on arguments that the Final Rule exceeds congressional authorization, is arbitrary and capricious under the Administrative Procedures Act (APA), and is unconstitutional. In addition, the states' complaint challenges the application of the Final Rule to states as employers under the 10th Amendment (which the states allege grants them immunity from the FLSA's requirements).

We will monitor the status of these cases and any other challenges to the DOL's Final Rule. Until further notice, however, employers should continue to prepare for the implementation of the Final Rule on December 1, 2016.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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