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DOL seeks to rewrite overtime rule

Published on August 28th, 2017 by Triton Benefits & HR Solutions

The U.S. Department of Labor recently decided to begin developing new regulations regarding workers' overtime. The final rule, drafted by the Obama administration, would make 4.2 million workers eligible for mandatory overtime pay.

The regulation was scheduled to go into effect Dec. 1, 2016, but was challenged in a lawsuit brought by 21 states and various business groups, including the U.S. Chamber of Commerce. Ultimately, the U.S. District Court for the Eastern District of Texas granted the plaintiffs' request for an emergency injunction, effectively stopping the law in its tracks on Nov. 22. In response, the DOL filed a motion to stop the lawsuit, which was denied Jan. 3, 2017. The department appealed and requested three extensions to give the Trump administration time to review the details the Obama administration had finalized. The last of these extensions ended June 30, HR Daily Advisor reported.

The DOL's response

The district court's reasoning for the injunction was that a salary threshold for overtime pay was unlawful. In its reply brief, the DOL defended its power to make such regulations, but suggested the levels set by the former administration were too high. Per the original final rule, any employee earning less than $913 per week – $47,476 per year – would be eligible for federally mandated overtime pay. The law also increased the annual salary threshold for highly compensated employees to $134,004. Secretary of Labor Alexander Acosta believed such increases are too burdensome for employers, but noted that lower thresholds may be appropriate. 

"This Court should simply lift the cloud created by the district court's broad reasoning, which would call into question any salary-level test adopted by the Department," the reply brief read, according to HR Daily Advisor.

A Request for Information

"The DOL has effectively opened the door for drafting a new overtime rule."

Instead of pursuing further, he DOL submitted a Request for Information regarding the final overtime rule to the Office of Information and Regulatory Affairs on July 26. RFIs are used to gain public input on an existing rule or proposed rule change. By submitting an RFI, the DOL has effectively opened the door for drafting a new overtime rule.  

Most notably, the DOL is requesting opinions on whether the current threshold of $23,660, set in 2004, should be updated for inflation. It also wants input on whether bonuses and incentives should contribute to that salary, how employers planned to implement changes in 2016 and other factors. The department also noted it is considering eliminating the salary requirement and regulating overtime strictly by job role, Reuters reported. The comment period ends Sept. 25, 2017.

The move angered some workers' rights advocates, who pointed out the Obama administration already reviewed 300,000 comments. For now, however, the overtime-related salary levels will remain as they are.