DOL Overtime Rule

Last year, the Trump Administration dropped its defense of the Obama-era Fair Labor Standards Act (FLSA) overtime rule, promulgated in late 2016. The rule raised 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 blocked the rule just days before it was set to take effect. DOL initially defended the lawsuit but elected to drop its defense after the inauguration of President Trump.

The federal district court judge who blocked the rule from coming into effect 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."

Earlier this year, the Department of Labor reissued seventeen opinion letters originally issued during the Bush Administration. The letters address specific cases of nearly a decade ago, but associations like the National Assn. of Manufacturers and the US Chamber heralded the the letters as helpful guidance on specific fact patterns, illustrating how DOL will interpret the Fair Labor Standards Act (FSLA).

The announcement was accompanied by news that DOL would 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." That process is ongoing.

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.