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Update on the Federal Overtime Rule

The Justice Department told the court it would rethink the minimum salary a worker must make before he is deemed “managerial” and not eligible for overtime pay.

The Trump administration said in a Texas court filing that it would rewrite an Obama-era rulemaking that dramatically expanded the number of workers covered by federal overtime rules.

Under former President Barack Obama, the Labor Department last year doubled to $47,000 the minimum annual salary threshold a worker must make before he or she can be deemed a “managerial” worker. These workers would then be exempt from federal law requiring that they are paid time and a half after working 40 hours in a week.

Business groups sued to overturn the rule, which they said raised the rate far too much. A Texas court struck it down on procedural grounds late last year. The Obama administration appealed but was unable to resolve the issue before the new administration took over.

That put the legal defense of the rule in the hands of the Trump administration, raising the question of what it would do.

The department decided not to advocate for the specific salary level ($913 per week) set in the final rule at this time and intends to undertake further rule making to determine what the salary level should be. The department also requested that the court address only the threshold legal question of  statutory authority to set salary levels. Restarting the public question process is a prerequisite before the department can overturn it and establish a new threshold.

The Justice Department did not indicate what the administration thought the new level would be.

Business groups applauded the move. “It’s great to see a Department of Labor finally taking the time to fully evaluate the impact its regulations will have on businesses. Secretary Acosta has once again proven he is a thoughtful leader who will work in the best interest of the American worker,” said Angelo Amador, executive director of the Restaurant Law Center, part of the National Restaurant Association.

Author: MRA
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