Overtime Rule Update

Yesterday, a lawsuit was filed challenging the Department of Labor’s (DOL) new overtime rule which significantly raises the salary threshold for the overtime exemption applying to certain executive, administrative, and professional employees. The lawsuit asks the court to stop the rule from going into effect. 

The lawsuit was filed by several business groups, including the Associated Builders and Contractors, the American Hotel and Lodging Association, and the National Retail Federation. They argue that the DOL has exceeded its authority by narrowing the overtime  exemption Congress established in the Fair Labor Standards Act for certain “white-collar” employees. They further contend that the automatic updates to the salary threshold violate the notice and comment requirements of the Administrative Procedure Act. 

The court considering this case is the same court which invalidated an overtime rule adopted by the DOL in 2016. The plaintiffs contend the new overtime rule violates the court’s prior ruling on the 2016 rule.  

The DOL’s new overtime rule goes into effect in phases, with the first phase becoming effective on July 1. We are closely following this case and will keep you posted on developments.

KZA Employer Report articles are for general information only; they are not intended and should not be construed to be legal advice. Reading or replying to such articles does not establish an attorney-client relationship. In addition, because the subject matters and applicable laws discussed in Employer Report articles are often in a state of change and not always applicable to every type of business entity or organization, readers should consult with counsel before making decisions based on the same.