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Business and Policy Areas
Business and Policy Areas
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Department of Labor Moves on Overtime Rule

July 6, 2017

Following months of anticipation, the Trump administration’s Department of Labor (DOL) has indicated that it intends to revisit the salary threshold for individuals who qualify as exempt from overtime pay requirements.

After a last-minute injunction in November 2016 prevented implementation of the amended rule (which bumped the salary threshold for employees eligible for overtime pay from $23,660 to $47,476), the Obama administration immediately appealed the decision. The case was still pending when the Trump administration took office, and many wondered if DOL would continue with the injunction’s appeal, given the updated rule’s unpopularity within the Republican party.

A series of delays in the confirmation of a new labor secretary added to the uncertainty, but once in office, Labor Secretary Alex Acosta has taken steps to show how his department will handle the rule.

Regarding the judicial appeal, the Department of Justice (DOJ) filed a brief with the 5th Circuit Court of Appeals on June 30. DOJ attorneys did not withdraw the appeal, but instead asked the court to confine its decision only to DOL’s authority to set a salary threshold under which workers are automatically eligible for overtime and to DOL’s right to use salary levels to determine eligibility for time-and-a-half pay in the future. The brief specifically asked the court not to address the salary level set by the 2016 rule as “the Department intends to revisit [it] through new rulemaking.”

Just days before the brief was filed, DOL sent a request for information on the rule to the Office of Management and Budget as a first step in initiating a new round of rulemaking. Given Acosta’s past comments on the rule—“[a]ny rule that has a dollar amount that hasn’t been updated is a problem because life gets a lot more expensive, but I also think the way that it was done created a shock to the system”—most observers expect any new rule to be similar in nature to the Obama-era rule, but with a much lower salary threshold.

However, DOJ explicitly told the 5th Circuit in its brief that DOL would not initiate any new rulemaking until and if the court affirms DOL’s right to set a salary level. Given the time involved with litigation, this means it could still be months before a new rulemaking process begins.

Contact

Megan Schneider
Assistant Director, Federal Affairs
202.861.2547
E-mail