Labor Department to review Obama-era rule that would expand overtime pay
WASHINGTON - The Labor Department said it is formally requesting feedback on a rule that would expand overtime pay to millions of workers - a sign that the Trump administration could move to scale it back.
Labor Secretary Alexander Acosta had previously said that he planned to review the pending regulation, which would more than double the income threshold that determines which workers should be eligible for overtime pay to about $47,500 a year, from the current threshold of $23,660 a year. Workers earning less than that income level qualify to earn one and a half times pay for any hours worked beyond 40 hours a week.
Earlier this month, Acosta told lawmakers at a budget hearing that he would be seeking more input on the rule, which was finalized last year by the Obama administration. The labor secretary also hinted during his confirmation hearing in March that it was unfortunate that the rule had not been updated in more than 10 years because life does "become more expensive." But he also said that doubling the threshold could "create a stress" on businesses by raising costs.
Supporters of the rule say the higher income threshold could lead to higher wages or give workers more free time to focus on their families, education or other goals. "Any change, any weakening of the standard by which workers are made eligible for overtime pay really is money out of workers' pockets," said Celine McNicholas, labor counsel for the Economic Policy Institute, a left-leaning think tank.
But the rule has also faced strong opposition from business groups who say the new threshold raises employment costs and may force them to cut back on some workers' hours. A federal judge blocked the Labor Department from enforcing the regulation last November after a collection of states and business groups filed a lawsuit challenging the rule.
Some employers have already made changes to help them comply with the rule, such as increasing workers' salaries and adjusting employees' schedules. Others are waiting to see what happens to the rule before making any final decisions.
The Labor Department announced a few other changes Tuesday that could affect other wage and safety regulations. The department proposed to delay until December a rule that would require companies to electronically report injuries and illnesses, a move that is meant to give the department more time to review the rule. The change comes as the Trump administration has scaled back on the amount of enforcement information and other data that is easily available online.
And the department said it would start to use a more customized approach when issuing guidance on how companies may be affected by rules for overtime pay, minimum wage and family leave. The department said it would bring back the use of opinion letters, which answer specific questions from employers about how they should comply with regulations, based on their specific circumstances.
Companies in similar situations could use the letters, which are made publicly available, to determine how they might be affected by a particular rule, says Ryan Glasgow, a partner on the labor and employment team at Hunton & Williams, an international law firm. But under the Obama administration, the Labor Department switched to offering more broad interpretations of the rules that did not always account for differences in job duties or other specific scenarios companies might encounter, Glasgow says.