Overtime Rules Face Challenges in Courts and Congress

New overtime rules set to take effect on December 1 are being challenged on multiple fronts. Recently, 21 states filed a lawsuit in Texas to stop implementation of the new rules, and the U.S. House of Representatives has passed a bill to delay the rules for six months.


Learn more about the U.S. Department of Labor’s new overtime rules that take effect Dec. 1.

The political website The Hill reports that President Obama has threatened to veto the House-passed bill. Regarding the Texas lawsuit, it’s unclear whether the court will hold a hearing or issue any decision before December 1, according to Will Sehestedt, government affairs manager for the Transportation Intermediaries Association (TIA), a trade organization for freight brokers. The group is advising its members to prepare for the overtime rules with the assumption that they will take effect on December 1.

Key elements of the new overtime law include:

  • More than doubles the salary threshold for white-collar employees who are exempt from overtime, from the current $23,660 per year to $47,476 per year.
  • Automatically updates the salary threshold every three years, based on wage growth.
  • Allows for only 10% of commission/bonus pay to be included in the employee’s compensation—and only if paid at least quarterly.

The new overtime rules will certainly affect the trucking industry. While most drivers are paid by the mile, dispatchers and other salaried office employees making less than $47,476 may be affected by the new law.

The states named in the lawsuit include Alabama, Arizona, Arkansas, Georgia, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Michigan, Mississippi, Nebraska, Nevada, New Mexico, Ohio, Oklahoma, South Carolina, Texas, Utah, and Wisconsin. According to TIA’s legal counsel, if the lawsuit is successful, the new overtime rules would most likely be unenforceable in all states.

Have questions? TIA members can attend the webinar “How will the New Department of Labor Overtime Rule Impact Your Operations and Compensation Plan?” from 2:00-3:30 p.m. on Oct. 27. Register here.