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Trump's Labor Dept. Tells Court It Will Revise Obama's Overtime Rule


The U.S. Labor Department told a federal appeals court Friday that while it intends to revise the Obama-era rule that made millions of workers eligible for overtime pay the agency will continue to defend its authority to create and enforce such a regulation.

In a brief filed in the lawsuit challenging the rule, the Labor Department urged the U.S. Court of Appeals for the Fifth Circuit to lift the cloud created by a Texas trial judge's broad conclusion that any salary-level test adopted by the agency would be unlawful.

In 2016, the Labor Department updated the federal salary threshold for overtime eligibility for the first time in 12 years, from $23,660 to $47,476. It made 4.2 million workers newly eligible for overtime pay.

A group of businesses and 21 states sued in Texas court over the regulation, arguing it would be a burden to companies and was federal overreach. A federal judge blocked the implementation of the policy late last year, just as it was set to go into effect on Dec. 1. A lawsuit in New Jersey court, filed this month by a group of Chipotle workers, could test the scope of that injunction.

The Labor Department said in its court filing that it has not decided to advocate for a specific salary level and intends instead to determine what that level should be. Regulators also said they won't move quickly to confront what level might be appropriate.

In light of this litigation contesting the department's authority to establish any salary level test, the department has decided not to proceed immediately with issuance of a notice of proposed rulemaking to address the appropriate salary level, Alisa Klein, a Justice Department lawyer, wrote in the brief. The rulemaking process imposes significant burdens on both the promulgating agency and the public, and the department is reluctant to issue a proposal predicated on its authority to establish a salary level test while this litigation remains pending.

Labor Secretary Alexander Acosta has previously said it would be appropriate to consider a new salary threshold but would consider amending the threshold. He said it was unfortunate that the rule had not been updated in a decade.

On Tuesday, the department sent a request for information to the Office of Management and Budget, calling for public comment, a sign from many observers that the department is moving toward revision on the rule.

Business groups have been carefully watching this case and have hoped that the rule would be rescinded or altered under the Trump administration. The National Restaurant Association submitted an amicus brief opposing the Obama overtime rule.

It's great to see a Department of Labor finally taking the time to fully evaluate the impact its regulations will have on businesses, said Angelo Amador, executive director of the Restaurant Law Center, in a statement.

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Erin Mulvaney, based in Washington, covers labor and employment. Contact her at emulvaney@alm.com. On Twitter: @erinmulvaney