ADEA Washington Update

DOL’s Implementation of Overtime Rule in Doubt

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OvertimeThe Obama Administration’s effort to update a Department of Labor (DOL) overtime rule faced several hurdles this fall and may be derailed entirely by the incoming administration.

On Nov. 22, the U.S. District Court in the Eastern Division of Texas issued a nationwide injunction preventing DOL from implementing the new overtime rule as planned on Dec. 1. According to the decision, the plaintiffs—Nevada and 20 other states—argued that the overtime requirements of the Fair Labor Standards Act “violate the Constitution by regulating the States and coercing them to adopt wage policy choices that adversely affect the States’ priorities, budgets, and services.”

The proposed overtime rules employ a new formula, which doubles the salary level that serves as a threshold for determining whether executive, administrative and professional employees are covered by the law. As a result, the rule change would make an estimated 4.2 million more workers eligible for overtime pay. 

DOL filed for, and was granted, an expedited briefing schedule for appeal. Despite the abbreviated timeline, the appeal will not be heard before February, when the new administration will have taken office. President-elect Trump’s nominee to head DOL, fast-food CEO Andrew Puzder, has been critical of federal minimum wage increases and may withdraw the appeal before it can be heard.

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