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DOL drops defense of overtime pay rule change, contemplates new rule

On Friday, June 30, 2017 the U.S. Department of Labor (DOL) indicated through legal briefs that it would not defend an Obama administration overtime pay rule. DOL decided not to defend the higher salary threshold of overtime pay for professional employees that was scheduled to take effect last December, and instead has asked the Fifth Circuit Court of Appeals to rule on whether the department had the authority to set overtime pay based on a worker’s salary. Twenty-one states and dozens of business groups had filed suit in the eastern district of Texas to stop DOL from implementing rules that they said would substantially increase employment costs.

The rule would have almost doubled the threshold for exemption from overtime pay for professional employees, also referred to as “white collar” employees from $23,660 ($455 per week) to $47,476 ($913 per week). On November 22, 2016, Texas U.S. District Court Judge Amos Mazzant issued a nationwide temporary injunction, blocking the U.S. Department of Labor (DOL) from implementing the new overtime pay rules scheduled to take effect on December 1, 2016.  Under the rule, 4.2 million additional workers would have been eligible for overtime pay.

“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,” stated DOL in its brief. “Instead, the department soon will publish a request for information seeking public input on several questions that will aid in the development of a proposal.” DOL plans to release a request for information for public comments to help determine what type of proposal if any they will release on overtime pay.

In November 2016, Texas U.S. District Court Judge Amos Mazzant issued a nationwide injunction in favor of the plaintiffs, blocking the implementation of the final overtime pay rule. In his analysis of the case, Judge Mazzant stated the DOL regulation seemed outside of the department’s authority. DOL then appealed the decision to the Fifth Circuit Court of Appeals. Later, in December, DOL filed a motion with the Texas U.S. District Court to delay a final decision until the Fifth Circuit Court of Appeals ruled on the case. However, the Texas district court denied the request.

On April 18, DOL filed a motion with the Fifth Circuit Court of Appeals for a 60-day extension until June 30, 2017, to file a brief in reply to the U.S. District Court of Texas’ injunction of the department’s overtime pay rule. DOL had requested the additional time to allow for Senate confirmation of DOL Secretary Acosta, and to give Acosta time to review the case. President Trump has been critical of the DOL overtime pay rule, and previously suggested that the White House may withdraw its appeal. Labor Secretary Acosta has previously stated that he would not be opposed to raising the salary threshold, although not as high as $47,000. DOL will soon publish a request for information for public comment to aid in their development of a future overtime pay proposal.

In 2015, NACo submitted comments to DOL expressing concerns over the increased administrative and financial burden the rule would impose on the nation’s counties, which employ more than 3.6 million people and provide services to over 305 million county residents. In June 2016, Mineral County, Nev. Commission Chair Jerrie Tipton testified on behalf of NACo before the House Committee on Small Business on the Department of Labor’s overtime rule. Additionally, NACo released a comprehensive “Analysis of the Impact of the U.S. Department of Labor’s Overtime Rule on Counties.”

NACo welcome the opportunity to comment on future proposals related to overtime pay from the Labor Department and will continue to monitor the latest developments.

NACo Resources:

Click here to read NACo’s Analysis of the Impact of the DOL Overtime rule on Counties

Click here to read the County News article on Commissioner Jerrie Tipton’s testimony before House Small Business committee on DOL Overtime Rule

Click here to read NACo’s comments to DOL on the Proposed Overtime Rule

Click here to read NACo’s blog on DOL’s proposed rule on Overtime Pay

About Daria Daniel (Full Bio)

Associate Legislative Director – Community, Economic & Workforce Development

Daria Daniel is the Associate Legislative Director for Community, Economic and Workforce Development at NACo. Daria is responsible for all policy development and lobbying for the association in the areas of housing, community, economic and workforce development.