Overtime Salary Test Should Stay, Labor Department Argues

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By Chris Opfer and Ben Penn

The Labor Department wants a federal appeals court to confirm that the DOL has the power to take workers’ salaries into account when determining who is eligible for overtime pay ( Nevada v. DOL, 5th Cir., No. 16-41606, briefs due 6/30/2017).

The department June 30 will ask the U.S. Court of Appeals for the Fifth Circuit to uphold the DOL’s use of a salary threshold to determine whether workers are automatically eligible for time-and-a-half pay for all hours beyond 40 per week, sources familiar with the strategy told Bloomberg BNA. The department is not likely to defend a pending Obama-era rule that would have doubled the salary threshold--to $47,000--but it does want the authority to set some threshold, likely at a lower level.

Federal district Judge Amos Mazzant put the pending rule on hold in 2016, saying the department focused too much on workers’ salaries—rather than their job duties—in updating an overtime exemption for white collar employees. Labor Secretary Alexander Acosta acknowledged during his March confirmation hearing that Mazzant’s decision also seemed to call into question whether the DOL can set any salary threshold.

The DOL June 27 sent a request for information on the overtime rule to the Office of Management and Budget, signaling that the department is ready to reconsider the pending regulation. Acosta implied during the confirmation hearing that he might support raising the salary threshold from about $24,000 to somewhere in the low $30,000 range to account for inflation.

To contact the reporters on this story: Chris Opfer in New York at copfer@bna.com; Ben Penn in Washington at bpenn@bna.com

To contact the editors responsible for this story: Peggy Aulino at maulino@bna.com; Terence Hyland at thyland@bna.com

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