Signaling end of overtime rule, DOL will seek public input on new regs

On June 7, Secretary of Labor Alexander Acosta said he will soon formally request the public’s input on new overtime regulations. The announcement signals that the U.S. Department of Labor (DOL) likely will drop its defense of former President Barack Obama’s overtime rule, according to one expert.

A request for information (RFI) likely will be filed with the White House’s Office of Management and Budget (OMB) in the next two to three weeks, Acosta told lawmakers during a budget hearing of the 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 ($47,476 annually). The change would have more than doubled the existing salary threshold for overtime.

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

President Obama’s DOL appealed the ruling to the U.S. 5th Circuit Court of Appeals. The Trump 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 as secretary of labor shortly after the DOL received the third delay, but he offered little insight about his plans for the rule. During his confirmation hearing, he dodged questions about what an appropriate salary level might be and called into question the legitimacy of any threshold at all.

New rulemaking

When asked about his plan for the overtime rule during the June 7 hearing, Acosta said the DOL plans to look at the 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,” Acosta said. “But I also think that the way [the Obama overtime rule] was done created a shock to the system and the department is in the process of drafting [an RFI] 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.”

Acosta 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 [the] statute,” he told the committee.

End of Obama’s overtime rule?

Acosta didn’t explicitly say the DOL will drop its defense of the litigation challenging the original rule, but that’s what it sounds like, according to H. Juanita Beecher, an attorney 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 the DOL’s reply brief is due in court, it certainly sounds like the DOL is going to drop the appeal, she said.

But even if the DOL drops its defense of the lawsuit, that may not be the last word on the original rule. A group of labor organizations has asked to take over the lawsuit. “With the recent presidential election, and particularly as more information becomes available regarding the [Trump] 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,” the labor organizations told the district court that granted the original injunction. The court has not issued a ruling on the organizations’ motion to assume defense of the rule.

About Kate McGovern Tornone:
Kate Tornone is an editor at BLR. She has almost 10 years’ experience covering a variety of employment law topics. Before coming to BLR, she served as editor of Thompson Information Services’ ADA and FLSA publications, coauthored 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 bachelor of arts in media studies. Kate can be reached at ktornone@blr.com.
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