HR Management & Compliance

Texas federal court fast-tracks suit challenging DOL’s overtime rule

Update: A ruling on the November 16 injunction hearing is expected on November 22. We will provide coverage on the ruling once it is issued.

A federal district court has agreed to fast-track a lawsuit challenging the U.S. Department of Labor’s (DOL) new overtime regulation. The court has scheduled oral arguments for November 16, just two weeks ahead of the rule’s December 1 effective date.

The rule will more than double the salary threshold for employees. Employees earning less than $913 per week ($47,476 annually) will have to be classified as nonexempt from the Fair Labor Standards Act’s (FLSA) overtime requirements, regardless of whether they meet any of the duties tests.

In September, 21 states filed a lawsuit alleging that the DOL exceeded its authority. A few weeks later, the states requested an emergency injunction to temporarily halt the rule and asked the court to expedite oral arguments. The court granted the second request, scheduling arguments for November 16, just two weeks before the rule takes effect.

Experts continue to recommend that employers move forward with implementation—and soon. Some have suggested employers should make any necessary changes well before December 1—for example, implementing changes during the week of Thanksgiving because the effective date falls on a Thursday. Adopting changes at least a few days early would allow employers to avoid reclassifying employees in the middle of a workweek, which could create wage and hour problems.

Business groups filed a similar legal challenge, but the cases were consolidated in State of Nevada v. U.S. Department of Labor, No. 4:16-cv-731 (E.D. Texas, Oct. 19, 2016).

The overtime rule’s effective date is rapidly approaching. On October 25, BLR will host “Communicating the Impact of DOL’s Final Overtime Rule: How to Effectively Inform Employees of Exemption Status Changes.” For information on how to register for the 60-minute webinar, click here.

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