Labor Secretary Mulling Auto-Update of Overtime Rule

By Ben Penn

Labor Secretary Alexander Acosta Nov. 14 told business community representatives he’s considering automatically updating time-and-a-half pay requirements to keep pace with inflation, sources present at a closed-door U.S. Chamber of Commerce meeting told Bloomberg Law.

The DOL is in the midst of crafting a new regulation that updates the salary level below which workers qualify for overtime pay, but without raising it to the level the Obama administration sought. Three sources in the room said Acosta identified a self-adjustment as one of the significant provisions the agency is now reviewing. That may not be welcome news for business representatives who have argued that the department must restart the rulemaking process every time it wants to change the salary level.

“An automatic annual increase mechanism to the salary levels is tremendously problematic as it would ensure the regulated community would never again be allowed to participate in a public debate regarding the salary levels,” the Chamber of Commerce wrote in comments to the DOL submitted in September in response to the agency’s request for information.

The agency published the RFI to solicit feedback on how to write a new overtime regulation that would boost the current salary threshold of $24,000, but keep it below the $47,000 level set by the Obama DOL in a rule that was eventually shot down by a federal judge.

Regarding the Chamber event, a spokesman for the Labor Department told Bloomberg Law, “The Secretary referenced a question in the RFI (#11) as particularly important.”

Whether a new threshold should be automatically increased and by what mechanism was question number 11 in the RFI.

Business Concerns

The secretary’s remarks raised concerns by some business advocates, who spoke with Bloomberg Law on condition of anonymity. Acosta delivered the comments at the headquarters of the very business group that urged the DOL not to include an auto escalation. The comments contradict the secretary’s recent remarks at several events on the importance of complying with the Administrative Procedure Act when engaging in rulemaking, one source added.

If the new rule does increase with inflation, this would score a surprising victory to worker advocates who supported the Obama rule. That regulation would’ve increased once every three years based on wage growth in the poorest census region.

Acosta also identified varying the salary threshold to account for regional costs of living as another factor under review, the sources said.

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