Employment Law, FLSA/Wages

Signaling End of Overtime Rule, DOL Will Seek Public Input for New Rule

President Trump’s Secretary of Labor said Wednesday that he will soon formally request the public’s input on new overtime regulations. That announcement signals that the U.S. Department of Labor (DOL) likely will drop its defense of President Obama’s overtime rule, according to one expert.overtime

A request for information (RFI) is likely to be filed with the White House’s Office of Management and Budget (OMB) in the next 2 to 3 weeks, Alexander Acosta told lawmakers during a budget hearing of the U.S. House of Representatives’ Committee on Appropriations.

Background

The Obama administration issued a new Fair Labor Standards Act (FLSA) overtime rule that was scheduled to take effect December 1, 2016. The rule would have required employers to pay overtime to employees earning less than $913 per week (which amounts to $47,476 annually). The change would have more than doubled the existing threshold.

States and business groups challenged the rule in court and a federal district court judge granted a preliminary injunction, temporarily halting the rule just days before its effective date.

President Obama’s DOL appealed the order to the 5th U.S. Circuit Court of Appeals. President Trump’s administration requested and received three extensions to file its reply brief with the court, citing the lack of a Secretary of Labor. Its response is now due June 30.

Acosta was confirmed shortly after the DOL received that third delay but he offered little insight about his plans for the rule. At his confirmation hearing, he dodged questions about what an appropriate salary level might be and instead called into question the legitimacy of any threshold at all.

New Rulemaking

When asked about his plan for the rule during Wednesday’s hearing, Acosta said that the DOL plans to look at the overtime rule “as a general matter.”

“I think that any rule that has a dollar amount that isn’t updated for as long as this … is a problem because life gets a lot more expensive,” he said. “But I also think that the way it was done created a shock to the system and the department is in the process of drafting a request for information that I think will be filed in … probably the next 2 to 3 weeks asking for public information and public comment on the overtime rule.”

He declined to say whether any new rulemaking would include automatic increases to the salary threshold, as the Obama rule did. “It would not be appropriate for me to prejudge any future regulation but it is always my intent to adhere to statute,” he told the committee.

The End of Obama’s Overtime Rule?

Acosta didn’t explicitly say that the DOL would be dropping its defense of the litigation challenging the original rule, but that’s what it sounds like, according to H. Juanita Beecher, of counsel with Fortney & Scott and an editor of Federal Employment Law Insider.

Because Acosta plans to submit an RFI for publication in the Federal Register around the time DOL’s reply brief is due in court, it certainly sounds like the DOL is going to drop their appeal, she told BLR®.

But even if the DOL drops its defense of the lawsuit, that may not be the last word on the Obama rule. A group of labor organizations has asked to take over: “With the recent presidential election, and particularly as more information becomes available regarding the incoming Administration’s plans, policy, and appointments, the Texas AFL-CIO has grave concerns as to whether its interests in the Final Rule will be represented by the DOL,” it told the district court that granted the original injunction. The court has not issued an order on the organization’s motion to assume defense of the rule.

Kate TornoneKate McGovern Tornone is an editor at BLR. She has almost 10 years’ experience covering a variety of employment law topics and currently writes for HR Daily Advisor and HR.BLR.com. Before coming to BLR, she served as editor of Thompson Information Services’ ADA and FLSA publications, co-authored the Guide to the ADA Amendments Act, and published several special reports. She graduated from The Catholic University of America in Washington, D.C., with a B.A. in media studies.