WASHINGTON – A federal rule that was scheduled to extend overtime pay to millions of workers last year but has been tangled up in court might never be implemented.
The Trump administration has indicated it would kill any chance of reviving former President Obama’s expansion of federal overtime pay rules, suggesting in a court filing that it may withdraw an Obama White House appeal of a federal court’s invalidation of the rule.
“The federal government respectfully requests a 30-day extension of time, to and including March 2, 2017, in which to file its reply brief,” the Justice Department said in a filing with the 5th Circuit Court of Appeals. “The requested extension is necessary to allow incoming leadership personnel adequate time to consider the issues.”
The overtime rule, which was to take effect on Dec. 1, would have doubled to $47,476 the maximum salary a worker can earn and still be eligible for mandatory overtime pay.
But 21 states and a coalition of business groups that included the U.S. Chamber of Commerce challenged the legality of the rule in court.
A federal judge in Texas agreed and granted them an injunction, delaying the overtime rule while the case is litigated.
The Department of Labor appealed the court ruling, but the court filing by the Trump administration indicates that the appeal could be dropped.
Trump made it clear during the presidential campaign he considered the overtime rule an example of the type of burdensome business regulations he would seek to roll back as president, perhaps by exempting small businesses or delaying implementation. Furthermore, Trump’s pick to head the Labor Department, fast-food businessman Andrew Puzder, has been critical of the overtime rule.
“As with the Obama administration’s other efforts to regulate their way to economic prosperity, it will not deliver as promised,” Puzder wrote last year in an op-ed for Forbes. “Turning highly sought-after entry level management careers into hourly jobs where employees punch a clock and are compensated for time spent rather than time well spent is hardly an improvement on the path from the working class to the middle class.”
Federal law requires that employees be paid time-and-a-half once they work more than 40 hours in a week. However, businesses may exempt workers from the requirement if their duties are “managerial” in nature and they reach a certain salary threshold.
The rule focuses primarily on updating the salary and compensation levels needed for executive, administrative and professional workers to be exempt from overtime, according to the Labor Department.
In short, it would double the amount salaried workers must make to be exempt from overtime from the current $23,660 to $47,476.
Supporters argue that the current overtime threshold is outdated and needs to be raised as both employees and employers navigate the changing economy.
The Labor Department last updated the overtime regulations in 2004, when it set
the annual salary level at $23,660.
If the rule is vacated by the court or the Trump administration, it will be good news for motorcoach operators, many of whom were scrambling to implement the new regulations last year before it was delayed by the court.
Last summer, after the rule was announced, several motorcoach operators said they expected it to cost them both money and time to implement.