As businesses gear up to comply with the new DOL rule for exempt administrative and executive employees, a group of officials from 21 States have filed a legal challenge to the constitutionality of the new rule. The lawsuit, filed in the Eastern District of Texas, challenges the increased salary requirements and the automatic future salary increases that are included in the rule, in large part because of the burden the higher salary requirements place on State government budgets. The plaintiff states are: Nevada; Texas; Alabama; Arizona; Arkansas; Georgia; Indiana; Kansas; Louisiana; Nebraska; Ohio; Oklahoma; South Carolina; Utah; Wisconsin; Kentucky, Iowa; Maine; New Mexico; Mississippi; Michigan.
The lawsuit does not mean that private employers should stop current efforts to analyze salaried exempt positions, and potentially reclassify exempt employees as non-exempt based on the new rule. It does, however, confirm that this area of the law is in flux (and may continue to be for some time).