Dive Brief
- The Justice Department (DOJ) said it won't defend the Labor Department's (DOL's) overtime rule, The Hill reported citing Bloomberg BNA. The overtime rule would have made an estimated 4 million additional workers eligible for overtime pay.
- The DOJ asked the 5th U.S. Circuit Court of appeals to dismiss its pending appeal of a ruling that temporarily blocked implementation of the Obama-era rule last year in light of a recent ruling it said mooted the appeal, Bloomberg BNA reported. On Aug. 31, a federal judge in Texas rejected the overtime rule, stating that it inappropriately focused on salaries instead of job descriptions to determine workers' overtime eligibility.
- The overtime rule promulgated by the Obama administration would have required employers pay overtime to workers earning under $47,476 a year. The wage threshold is currently $23,660. DOL dropped its defense of the overtime rule back in June and indicated that it is reconsidering the overtime rule.
Dive Insight:
The era of the Obama overtime rule is essentially over — but that doesn't mean overtime changes aren't on the horizon. Many pro-business groups have publicly stated they would support more incremental increases to the overtime threshold, as the current threshold has been in place for over 20 years. The debate over the overtime rule former President Obama put forth centered mostly around the amount of the increase, not whether an update was needed.
DOJ's withdrawal of its defense of the overtime rule is just one more in a string of setbacks for the controversial Obama-era effort to raise the overtime threshold. Last week's ruling that the overtime rule as it stands was "invalid" was hailed by some as one more nail in the rule's coffin. And indeed, it is likely that the specific proposals in the Obama rule, namely attempts to raise the salary threshold to $47,476 a year, are done.
Other updates to overtime requirements may still be on the horizon, however. DOL could still adopt a new threshold, according to Eric B. Meyer, a partner at Dilworth Paxson. The agency has already taken the first steps towards a new rulemaking, but employers won't likely have to worry about a new threshold under the current administration being twice as high as the old one.
