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Overtime Threshold Gets another Review

ISRI members facing complicated labor law changes might get another chance to be heard on the matter now that the U.S. Department of Labor (DOL) has signaled it may move to scale back the Obama-era rule expanding overtime eligibility.

In a development most have expected, as ISRI reported earlier this year, the DOL last week dropped its defense of the Obama administration’s overtime rule, but indicated it will defend the agency’s right to set a salary threshold on who qualifies for overtime pay in the future. This means that ISRI members may get the opportunity to help shape a revised rule in the near future through the public comment and rulemaking process.

 

Late last year, the DOL issued final rules on the Fair Labor Standards Act (FLSA) overtime rules which amended the “white collar” exemptions of the FLSA and stipulated that the Labor Department will raise the threshold every three years going forward. The overtime rule would have doubled to $47,476 the salary threshold under which virtually all workers are guaranteed overtime pay if they work more than 40 hours per week. ISRI members and industry at large argued that this new rule would be quite disruptive and seriously damaging to a wide array of workplaces and employees.

 

The rule was set to take effect last December, but 21 states and various industry groups challenged the rule which resulted in the granting of a preliminary injunction by a federal judge in Texas that temporarily blocked the rule. The Obama administration appealed, leaving the Trump administration to decide whether to continue the appeal or drop it.

 

Overtime reform is not dead and ISRI members must remain engaged. Despite the latest developments, the Trump Administration has made it clear that it will continue on the path of overtime pay review. In briefs filed on June 30, 2017, DOL asked the 5th Circuit Court of Appeals to uphold the agency’s legal authority to set a salary threshold for overtime pay eligibility. However, the agency also submitted a Request for Information to the Office of Management and Budget (OMB) seeking public input on questions that will aid the agency in drafting a new overtime rule.

 

Labor Secretary Alexander Acosta told Congress earlier this year that an update to the overtime rule might be warranted, but that he had “serious questions” about the previous administration’s efforts to double the salary threshold. That “goes far beyond a cost of living adjustment,” Acosta said. He went on to say that an inflation-adjusted threshold would be about $33,000.

 

Many in the business community are concerned that the overtime threshold will adversely affect employers with limited revenues and could harm many affected employees as well. Creating a “one-size-fits-all” salary threshold for overtime eligibility across the country – inconsiderate of cost of living differences – would not be workable for many employers and, in fact, would harm many affected employees as well. Without sufficient time to plan for the increase, it is arguable that cuts and demotions will become inevitable, and workers will actually end up making less not more.

 

As the proposed rulemaking process takes hold, ISRI will continue to monitor the situation and call upon its members to engage at the appropriate time to ensure the needs of the recycling industry are heard.  In the meantime, if you have any questions about the situation or overtime laws, contact ISRI Government Relations.

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