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Managing Your Church Blog, September, 2016
BREAKING—New Overtime Rule Challenged by Officials from 21 States
Two new federal lawsuits seek to block the Department of Labor’s overtime changes.
BREAKING—New Overtime Rule Challenged by Officials from 21 States

In order to block the new overtime rule of the US Department of Labor (DOL), the attorney general for Nevada, Adam Laxalt, filed a lawsuit in federal court on September 20, according to the Associated Press (AP). The new overtime rule is set to take effect on December 1. Attorney General Laxalt, a Republican, was joined in the suit by the attorneys general of 21 states, reports the AP. The lawsuit was filed in US District Court in Eastern Texas.

Another lawsuit was filed the same day, this one by 50 business groups, including the US Chamber of Commerce, challenging the same DOL rule, reports Politico.

Last May, the DOL issued new regulations that update the so-called "white collar" exemptions from the overtime pay requirement, doubling the salary threshold (to $47,476 annually) below which most workers in the country are guaranteed time-and-a-half pay for working more than 40 hours.

“This rule, pushed by distant bureaucrats in DC, tramples on state and local government budgets, forcing states to shift money from other important programs to balance their budgets, including programs intended to protect the very families that purportedly benefit from such federal overreach,” Laxalt said in a statement reported by the AP.

The Chamber of Commerce’s lawsuit has two principal arguments, according to Politico. The first is that the new salary threshold is “indefensibly high”; the second is that the DOL does not have proper authority to update the rule as currently planned.

The AP reports that business interests “say the changes are too much and too fast.”

“We believe that many employers across our state and the country—large and small alike—will not be able to meet the high cost of these ongoing rate changes, and as a result, will be forced to curtail hiring or even lay off employees,” Kristin McMillan, president of the Las Vegas Metro Chamber of Commerce, told the AP.

But representatives of the federal government are having none of it, seeing the new regulations— updated only once since the 1970s—as a necessary measure in the best interests of workers. “I look forward to vigorously defending our efforts to give more hardworking people a meaningful chance to get by,” US Secretary of Labor Thomas Perez told the AP, describing the newly-filed lawsuits as partisan tactics aimed at obstruction.

What This Means for Churches

For churches and church leaders, the DOL overtime regulations updates are a serious issue and a potentially large change affecting staffing, budgets, and more.

Richard Hammar, nationally recognized attorney, CPA, and senior editor for Church Law & Tax, covers “How the New Overtime Rules Will Affect Churches” in the September/October issue of Church Law & Tax Report.

These newly filed lawsuits have yet to receive a judgment in the courts, therefore one could only speculate about their ultimate effect on the DOL’s planned December 1 changes. Kiplinger Letter reports the legal challenges likely will find sympathy in the federal district courts, only to lose at the appellate level. That would mean opponents of the change would, at best, see a delay to the implementation.

Church Law & Tax will continue to cover this issue, including breaking news, as developments occur. Become a subscriber for comprehensive coverage, sign-up for free email alerts about this and other church-related legal and tax issues, or follow us on Facebook or Twitter.

Samuel Ogles is the assistant editor and marketer for Church Law & Tax.