- The much-debated Labor Dept.'s impending FLSA rule to extend mandatory overtime pay to more than four million American workers is officially under siege, as officials from 21 U.S. states filed a lawsuit yesterday claiming the Obama administration's initiative will place a "heavy burden on state budgets," according to Huffington Post.
- Filed in federal court in Sherman, Texas, the suit says that under the rule (which effectively doubles the exempt threshold and is set to take effect Dec. 1), many state employees would become eligible for overtime pay even though their management duties actually should designate them as exempt from collecting overtime.
- Plaintiffs in the lawsuit include the states of Texas, Nevada, Michigan, Wisconsin, Georgia and Ohio, among others, Huffington Post reports.
Critics of the rule, including Attorneys General from several of the states in the lawsuit, say if the rule takes effect on time, the result will have disastrous economic repercussions. Business groups — from the hospitality industry to the "prestige"-type workers — also have complained, saying the rule will force employers to shift salaried employees to hourly pay as well as create more part-time jobs by cutting hours.
Private sector employers and HR leaders can't count on the lawsuit to stop the rule from happening, so it's probably best that they continue to make the necessary changes to be compliant. If they haven't started to plan for the Dec. 1 deadline, it's time to get rolling, and there are several critical ways to prepare.
The U.S. Department of Labor, which released the rule in May, had no immediate comment yesterday on the litigation. Last week, in response to reports that a lawsuit challenging the rule was imminent, Labor Department official David Weil said in a statement “we are confident in the legality of all aspects of our rule.”