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By: Timothy Holdsworth
On September 20, twenty-one (21) states filed a challenge to the Department of Labor’s (“DOL”) increases to the minimum salary included in the final rules amending the Fair Labor Standard Act’s (“FLSA”) White Collar Exemptions, released in May.
As you may recall, these changes increase the minimum salary for individuals paid under the FLSA’s “white collar” exemptions to $47,474 per year, with an effective date of December 1, 2016.
In the complaint, the states argue that the new overtime rules unconstitutionally infringe on their sovereign power to dictate the pay, hours, and compensation of state employees, and, therefore, how the states allocate their budgets.
The states also argue that the DOL exceeded its Congressional authority under the FLSA by enacting changes to the white collar exemption’s salary level, highly compensated employee minimum salary level, and automatically updating these salary levels without going through notice-and-comment rulemaking.
As we have previously discussed, challenges to the DOL’s final rule were expected. However, it is unclear whether this challenge will substantially change or delay the enforcement date of December 1, 2016. As a result, we strongly encourage our clients to continue reviewing all of their salaried exempt positions to determine what changes may need to be made to be compliant with the final rule. In the meantime, we will keep you updated on any major developments in this case.