Trump Administration Walks Away from Overtime Rule

Published July 5th, 2017 -  - 07.05.1710


On Friday, the Trump Administration finally took a position in the Fifth Circuit litigation over the validity of the Obama Administration’s rule to raise the overtime salary threshold to $47,476 from the $23,660 level that has been in place since 2004.  On the eve of the rule’s implementation in 2016, Judge Amos Mazzant (E.D. Tex.) had issued a nation-wide injunction enjoining the Department from enforcing the rule.  Judge Mazzant found that the Department lacked the authority under the Fair Labor Standards Act to impose a salary threshold for determining overtime eligibility – effectively invalidating every overtime regulation since 1938.  Just prior to Inauguration Day, the Obama Administration filed a brief in the Fifth Circuit asking the appeals court to reverse the district court’s decision and lift the injunction, asserting both that the Department had the authority impose a salary threshold and that it had set the threshold at an appropriate level.

The Trump Administration walked away from defending the new salary threshold while attempting to maintain its authority to issue in its own rule.  In its reply brief, the Department of Labor continued to defend its authority to set a salary threshold in conjunction with a duties test.  The Department rejected Judge Mazzant’s assertion that the statute compelled that the Department adjudge overtime eligibility strictly on the basis of a salaried employee’s duties.  The Department did not, however, ask the Fifth Circuit to affirm the validity of the Obama Administration rule.  Instead, the Department signaled that it was abandoning the Obama rule and that it would be revisiting the question of the appropriate salary threshold, telling the court that it “has decided not to advocate for the specific salary level ($913 per week) set in the final rule at this time and intends to undertake further rulemaking to determine what the salary level should be.”

The Department’s position in the case leaves open several questions:

  • What happens to the injunction? The brief does not make clear whether the Administration is asking the Fifth Circuit to lift the injunction or not.
  • Will the Fifth Circuit allow the Department to split the baby or will it dismiss the case as moot since the Department effectively said that it won’t be enforcing the rule and leave the question of the Department’s authority to set a salary threshold to a challenge to a new rule?
  • Will the court finally act on the AFL-CIO’s motion to intervene in the case to defend the Obama-era threshold?
  • What, if any, impact will resolution of this case have on the private lawsuit pending against Chipotle for its failure to pay overtime in accordance with the Obama rule?
  • What methodology will the Department use if it reproposes a new threshold and what threshold will that methodology yield?

What is clear is that the Trump Administration has again turned its back on American workers and sided with corporations to the detriment of those workers.  The right of more than four million workers to the protection of the overtime law is at stake in the Fifth Circuit.  By abandoning defense of the new salary threshold, the Trump Administration told those four million workers that it does not care that they are stuck with a law that is out of date and fails to ensure that they get paid what they deserve.

The Trump Administration walked away from these four million workers without hearing from a single one of them.  They have not held any hearings, received any comments from the public or done any outreach to the people whose lives and livelihoods they are upending.  Without this input, the Department has acceded to the demands of big business and corporate lobbyists to jettison the Obama rule.  In fact, just a few days before the Department’s brief was filed, the Department announced that it is just now starting the process of seeking information from the public on what the threshold should be.  This “request for information” is unnecessary – the Obama rule is based on hundreds of thousands of comments from the public, all of which are publicly available and could inform the Trump Administration’s decisions.  The effect of this unnecessary procedure is simply to delay and thereby extend the time in which hard-working Americans who make as little as a poverty wage of $23,660 can be exploited and forced to work countless unpaid hours.

The Department’s step to defend its right to eventually get around to setting a new threshold – one that will likely be too low – is cold comfort for the four million workers hoping that the Department would defend their right to a threshold that gave them the promise of a decent living.

 

 

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