Finance News & Insights

Why is the DOL appealing court’s overtime rule dismissal?

When a court ruled the Obama-era changes to the overtime rule were unconstitutional, CFOs everywhere thought that was the end of the story.

But the DOL isn’t going to let a Texas judge simply toss out those overtime rules. The agency has officially appealed the court’s decision, and its reason for the move suggests the DOL has some major plans regarding overtime reg in the near future.

As HR Morning reported previously, in a recent ruling, a federal court effectively said the DOL overstepped and set the salary threshold so high that it had effectively made employees’ duties, functions and tasks irrelevant.

And the agency didn’t actually have the authority under the FLSA to do that, the court added.

Finally, the court said the DOL’s OT provision that automatically escalated the salary threshold every three years was also unlawful.

Now, it appears the DOL isn’t OK with that decision.

Until the new rules are drafted …

With the appeal, the DOL is looking to defend its authority to “define and delimit” the OT regs but also distance itself from the salary threshold increase the Obama administration DOL created. This move will protect the DOL’s authority to set a lower salary threshold that’s more in line with the Trump administration’s pro-employer agenda, experts say.

And not only is the agency fighting the court’s decision, it’s also going to ask the Fifth Circuit to suspend the appeal process while it rewrites the current overtime regs.

The request from the feds is a very unusual one because it would give the DOL a chance to announce new overtime regs before the court even announces whether it even has the authority to do so.

Somewhere between $23,660 & $47,476

DOL Secretary Acosta has said on numerous occasions that he plans to increase the current OT salary threshold but has yet to offer a clear picture of how much higher it will be.

The only consistent info Acosta has offered is comments the new threshold will be somewhere between the current $23,660 threshold and the $47,476 amount under the Obama administration.

As reported on Employee Benefit News, experts believe the DOL’s latest move is consistent with it’s current position on the overtime rule. Richard Glovsky, co-chair of the Locke Lord law firm’s labor and employment practice group, said:

“This [the DOL appeal] is not surprising and makes sense from the DOL’s perspective. This may help clarify, expedite and add order to a context which is currently unclear.”

However, Glovsky cautioned employers to stay informed about the final outcome of this DOL appeal because if they don’t, employers “… are playing Russian roulette with no particular insight into how this is going to play out.”

To that end, HR Morning will continue to provide updates on this story as it continues to evolve.

A version of this story initially ran on our sister website, HR Morning.

Print Friendly

Subscribe Today

Get the latest and greatest finance news and insights delivered to your inbox.