DOL Overtime Rule
UPDATE: DOL Abandons Overtime Rule, Asks Court to OK Salary Threshold Concept
President Trump’s U.S. Labor Dept. (DOL) has dropped its defense of the Obama administration’s Fair Labor Standards Act (FLSA) overtime rule, promulgated in late 2016. The rule raises the salary threshold for overtime eligibility from $455/week (which amounts to $23,660 annually) to $913/week ($47,476 annually). States and business groups challenged the rule in court, alleging that DOL overstepped its authority, and a federal district court enjoined the rule just days before it was set to take effect. DOL initially defended the lawsuit but, after Trump’s inauguration, went silent.
In blocking the rule, a federal district court judge questioned the legality of any salary threshold, a standard DOL has used as one factor for determining overtime eligibility since the 1940s. In dropping its defense, the agency also asked the 5th Circuit to approve the use of some (presumably lower) threshold, arguing that there was "no basis to call into question a regulatory test that has been in place since the FLSA’s inception."
The announcement is accompanied by news that DOL will start a new rulemaking process. The agency requested that the 5th Circuit not address the validity of the $47,476 threshold, which "the Department intends to revisit through new rulemaking." DOL began that process July 27 with a public Request for Information (RFI).
CDA will actively participate in the regulatory process to assure that any new rules governing overtime pay is fair and equitable for employers.
For more information on the overtime rule, visit the DOL's website.