Labor Dept. plans revision of stalled overtime rule

 

Dive Brief:

  • The U.S. Department of Labor has asked the U.S. Court of Appeals for the Fifth Circuit to confirm that it is permitted to use salary as a factor in determining which workers are eligible for overtime before it begins a new rulemaking process to amend a pending overtime regulation, according to Bloomberg BNA.
  • Last November, U.S. District Court for the Eastern District of Texas Amos Mazzant put a nationwide injunction on the implementation of a new overtime rule, enacted by President Barack Obama, that would have raised the threshold salary to $913 per week, or $47,476 per year, which was more than double the previous cap. Mazzant did not rule against a wage limit in determining overtime but said the DOL’s increase was so high that it overshadowed other tests like job duties.
  • The DOL under Obama had appealed Mazzant’s ruling, but aside from requesting three filing extensions, this is the first response the Trump administration has made regarding the appeal.

Dive Insight:

The Trump administration did not ask the court to rule on the specific wage levels in the pending overtime rule, and there is no indication as to what the DOL has in mind for a new salary threshold.

The Obama-era rule would make approximately 4 million new workers eligible for overtime. Many labor organizations and advocacy groups applauded the new salary level, but others like the National Association of Home Builders said the new rule didn’t take into account different pay levels in various parts of the country and would force employers to drop some workers off salary back to hourly, which some might see as a demotion.

The Associated Builders and Contractors, along with other industry groups including the NAHB, filed a lawsuit against the DOL last year, in addition to another court action brought by 21 states. Both suits argued that the DOL overstepped its statutory reaches and that the rule change would create a compliance burden for many employers.

The overtime rule could be the latest victim in an aggressive campaign by the Trump administration and the current majority-Republican Congress to eliminate regulations that some consider to not be business-friendly.

For example, the Occupational Safety and Health Administration, which operates under the DOL, recently announced that it is seeking to modify the beryllium exposure rule that recently went into effect and that it will delay enforcement of a new silica exposure rule. Also shelved is OSHA’s electronic recordkeeping rule, which would require employers to file their injury and illness reports online.

The House has also repealed the Fair Pay and Safe Workplaces Act, also known as the “blacklisting” rule, which would have required companies to disclose previous DOL violations as a condition of bidding on federal contracts, and the DOL has proposed rescinding the “persuader” rule, which would have required companies to disclose communications they had with any third party about employee unionization efforts.

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