FLSA Overtime Update: Decision Postponed by New Secretary of Labor Nominee

Businesses spent the past few months preparing for the implementation of the U.S. Department of Labor’s “monumental changes” to the FLSA overtime rule this December, only to find them stalled at the eleventh hour by a November 22 injunction.

Since then, little update has been made, and it’s difficult to predict the intentions of the Trump Administration, which has yet to get a new Secretary of Labor confirmed.

A quick overview of the overtime rule:

For those who need a refresher, the changes to the overtime rule -- an initiative of former President Obama’s DOL -- would have increased the salary threshold for employees exempt from overtime pay, ultimately extending overtime protections to an estimated 4.2 million workers who are currently ineligible. The regulation called for a $47,476 annual salary threshold, a significant departure from the current $23,660 threshold (a number that hasn’t been updated in the past 12 years).

While the proposed changes have equally vehement supporters and critics, it’s clear that overtime work remains a prevalent issue across industries.

Its status now:

Since the November 22 injunction, the overtime rule has remained mostly in limbo, and hasn’t been directly addressed by the new administration. However, Chief of Staff Reince Priebus’s January 20 memo (freezing federal regulations that have yet to take effect) has fueled the notion that the Department of Labor under President Trump won’t fight opposition to the overtime rule. Some believe this freeze, in conjunction with the fair amount of Obama executive orders President Trump has already reversed, is a sure sign that the Trump administration will reverse some of the pro-labor regulations of the Obama administration -- in particular the overtime rule.

Just five days after the freeze memo, the newly Trump-backed DOL was granted a 30-day extension to file a brief in its appeal of the injunction of the rule. Though this 30-day extension should be coming to an end as we near the end of February, it appears that an additional extension will be granted, and those waiting for an actual decision regarding the overtime rule will have to wait longer (more on this below).

Speculation for the future:

After the failed nomination of fast-food CEO Andy Puzder -- who, as many know, withdrew from contention just a day before his Senate confirmation hearing -- the new nomination for Secretary of Labor goes to Alexander Acosta. Because of this, the DOL asked for an additional 60-day extension of time to file it’s brief in the injunction of the hearing, claiming it is necessary to “allow incoming leadership personnel adequate time to consider the issues.” Currently unopposed, this request will likely be granted, so employers will have to wait until well into the spring to see any decisions for the overtime rule.

As of now, there’s little clear indication of Acosta’s stance on the overtime rule, but we can be sure that there won’t be many overtime updates until his confirmation. In the meanwhile, businesses should continue to conduct the valuable work of auditing their employees’ classifications, and ensuring that those currently classified as nonexempt from overtime pay are justifiably so.