ADMINISTRATION TELLS COURT IT PLANS TO REVISE SALARY OVERTIME RULE

Last year a salary overtime rule was to take effect raising minimum salary levels required for certain managerial overtime exemptions from about $24,000.00 to about $47,000.00.  Last November, a federal district court in Texas enjoined the rule’s implementation and the issue was appealed to the Fifth Circuit Court of Appeals.  Labor Department lawyers told the appeals court on June 30 that it planned to revise the Obama-era overtime rule, but asked the court to affirm the DOL’s right to use salary tests to determine eligibility for time-and-a-half pay in the future.  The DOL attorneys stated that they would not initiate a new rule-making procedure until the appeals court affirms the right to set a salary level. 

The DOL on June 27 sent a request for information to the Office of Management and Budget on the subject, but the details of the request have not yet been made public, but they are likely to signal the specific aspects of the rule the DOL wants to change.  DOL Secretary Acosta has indicated that he is open to raising the salary threshold but not as much as the $47,000.00 level the Obama Administration set.  Speculation suggests that he may favor increasing the salary exemption level to something around $33,000.00.

Editor’s Note: The previous salary exemption level for managerial employees of $23,660.00 remains in effect during the litigation, at least until the appeals court makes a ruling.  There is some uncertainty, however, due to the fact that the appeals court has the authority to vacate the preliminary injunction blocking the rule, although the DOL is likely to ask the court to continue the injunction in some manner.  The revision of the rule will take a considerable period of time, as there must be a new notice of proposed rule making and a comment period, leading to a new final rule.