On October 30, 2017, Halloween Eve, the Department of Justice, on behalf of the Department of Labor (“DOL”), filed a notice to appeal the Texas federal judge’s preliminary block on the overtime rule.
According to a news release of the DOL, “Once this appeal is docketed, the Department of Justice will file a motion with the Fifth Circuit to hold the appeal in abeyance while the Department of Labor undertakes further rulemaking to determine what the salary level should be.”
As you may recall, the so-called “overtime rule” was set to double the minimum salary threshold for white collar exempt workers, effective December 1, 2016, from $455 per week or $23,660 per year to $913 per week of $47,476 per year. Prior to the rule’s effective date, however, the Honorable Amos Mazzant, a federal judge in Texas, issued a nationwide preliminary injunction against the rule’s enforcement, meaning that the DOL was temporarily barred from enforcing the rule. Judge Mazzant reasoned that the DOL had “exceeded its authority and gone too far” with the overtime rule.
Based on reports, the DOL filed the notice of appeal to preserve its authority, under Secretary Alexander Acosta, to establish overtime regulations. In other words, the DOL is not looking to bring back the Obama-era salary threshold, but rather to establish that the DOL has the authority to set rules that include increasing the salary threshold to a more reasonable amount.
A reasonable salary threshold, for Acosta, is somewhere around a cost-of-living increase. During his confirmation hearings, Acosta indicated that he was in favor of giving the salary threshold, last addressed in 2004, a cost-of-living increase to around $33,000. Acosta did, however, clearly state that the increase to $47,476 was too high. Nonetheless, until the DOL repeals the overtime rule, $47,476 remains the current law, albeit temporarily blocked.
As stated, while it seems unlikely that the Obama-era threshold will reemerge, the law does not offer a clear answer for employers. In the event that the preliminary injunction is lifted, however, employers will need to act quickly to provide the necessary salary increases or overtime payments, which may include back pay. So, what’s an employer to do? Here are three tips:
- Continue to closely monitor the progress of the overtime rule, both with the courts and with the DOL’s rulemaking process.
- Be prepared to identify the group of employees who would be impacted by the overtime rule, in the event that the preliminary injunction is lifted.
- Contact legal counsel to discuss your options.
The Eastern Pennsylvania Employment Log (EPELog) is a publication of the KingSpry Employment Law Practice Group. Jeffrey T. Tucker, Esquire, is our editor-in-chief. EPELog is meant to be informational and does not constitute legal advice.