Opponents Work Overtime to Stop Labor Department’s New Rule


With less than one month until the new Labor Department overtime regulation takes effect, 21 states and business groups are trying to halt the rule, which more than doubles the salary threshold for exemption from overtime pay starting Dec. 1. 

On Nov. 16, a federal district court is to hear arguments on an injunction over the rule. A motion by the U.S. Chamber of Commerce and other groups to consolidate two lawsuits was approved Oct. 19 by a federal district judge (Plano Chamber of Commerce v. Perez, E.D. Tex., No. 4:16-cv-0731, motion granted 10/19/16). The 21 states and the chamber claimed that the rule exceeded the government's authority under the Fair Labor Standards Act and the Administrative Procedure Act.  The states want an emergency injunction before Dec. 1; the chamber requested that the rule be declared unlawful.

Under the overtime final rule (RIN 1235-AA11), which was issued May 18, the standard salary amount used by employers to qualify executive, administrative and professional workers as exempt from overtime compensation rises to $913 a week, or $47,476 a year, from $455 a week. For highly compensated workers, the annual amount rose to $134,004 from $100,000.

But not all employers are prepared for the rule. David French, chief lobbyist at the National Retail Federation, told Benn Penn of Bloomberg BNA’s Daily Labor Report, that while “a lot of large employers are fairly far along, the information gulf for small employers is massive, and I don't think the Department of Labor has focused on that.”

“We've got an impending crisis that's going to hit right after the election,” French said Nov. 1.

Opposition groups, in trying to develop a comprehensive strategy, also are turning to those leading the transition for the next White House administration’s Labor Department leadership staff. 

Evan Armstrong, a lobbyist for the Retail Industry Leaders Association, told Penn that he would try to meet with members of a Hillary Clinton or Donald Trump transition team. Armstrong’s goal: To request the removal of the rule's provision that updates the salary threshold for overtime exemption every three years. Armstrong said he did not want to focus on having the entire regulation rescinded.

French said: “The first conversation we are likely to have with the next Labor Department is a realistic assessment of whether those rules are necessary or whether they could be slowed down or delayed.” French added that the retail association likely would meet with a Clinton transition staff on overtime and other open-ended issues.

Chris Lu, the deputy labor secretary, told Penn that no matter who wins the election Tuesday, the transition plan is to organize the department’s works in progress to help the next team set an agenda.

“Our job is basically to give the incoming folks the best picture of what the department does right now, as well as some of the ongoing projects, some of the opportunities, some of the challenges,” said Lu, who is overseeing the transition effort. “And they will take that information and make their own decisions about what the priorities should be.”

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