Overtime Rule is Back in the News
The overtime rule, which has been in limbo for six months, is making news once again and changes could soon be on the horizon.
On June 27th, the U.S. Department of Labor (DOL) sent a formal request for information (RFI) to the Office of Management and Budget seeking feedback on the Obama administration overtime rule. This signals that the DOL may be looking into changing or replacing the 2016 adjustment to the salary level under which workers must be paid overtime, although a request for information is outside the formal rule-making process.
The overtime rule, a cornerstone of the of the Obama administration’s labor policy, sought to double the threshold at which executive, administrative, and professional employees are exempt from overtime pay, increasing it to $47,476 annually from the current $23,660 established in 2004.
The rule was met with opposition. While most business groups agreed that the rule is a necessity, many claimed it was too great of an increase, with too short of a deadline to comply. Ultimately, a federal judge agreed to block implementation of the policy about a week before it was supposed to go into effect on December 1, 2016.
In Obama’s final weeks in office, the Labor Department appealed the injunction, which is still pending. It has been given three extensions since President Trump took office. The latest deadline is set for June 30, 2017 which means the RFI comes at a pivotal time.
What does this mean?
In a recent SHRM article, Brett Coburn, an attorney with Alston & Bird in Atlanta shares his interpretation of this development:
“I think the request for information and the additional opportunity for public comment certainly signals that the DOL is at least considering doing something with the Obama administration’s overtime rule other than either continuing the legal fight in support of the rule before the 5th Circuit Court of Appeals or abandoning the current appeal of the injunction blocking the rule and letting the rule die on the vine. Secretary Acosta indicated during the Senate confirmation process that he might be open to a smaller increase in the minimum salary threshold for the white-collar exemptions, and this move may very well be the first step in that direction. If that is the direction the DOL ultimately decides to go, they most likely would go through additional rulemaking to get to a set of revised regulations that include a more modest increase in the salary threshold than the Obama administration’s rule.”
It’s too soon to speculate what the outcome will ultimately be. Stay tuned, we will report updates as they become available.