Based on the many comments during the Presidential campaign, a Trump administration promises to overhaul many current federal regs, including the DOL’s new overtime rule. But what does the administration actually have the power to change? And when can employers expect to see any possible changes?
Trump himself said he’d exempt small business from the rule.
Politico recently broke down the various situations that could play out under the new administration.
Is this the end?
The major question many finance chiefs are probably asking themselves is: Can the new OT rule simply be killed outright when Trump takes office in January?
In short, no. In order to do this, the administration would have to rely on the Congressional Review Act, and the new OT rule came out too far in advance of the administration change for this to happen under that law.
What the Trump administration could do, however, is propose an entirely new set of regulations that would cancel out the current OT rule. Of course, this is a major undertaking that would take a lot of time.
As we’ve seen with the current FLSA changes, such a move would require a notice and comment period that could easily last a year or longer. On top of all that, any proposal would have to comply with the Administrative Procedures Act. That means the new administration, specifically the Trump DOL, would have to prove a change in economic circumstances prompted the rule change.
Another factor the new administration has to weigh with its decision: popular opinion.
While most businesses are staunchly opposed to the DOL overtime changes, the new rule has bi-partisan support from individuals. A Morning Consult study found 64% of Democrats, 57% of Republicans and 58% of independents support overtime rule.
What’s more likely
Even though the chances of an outright overhaul of the new OT regs are slim to none, the new threshold could look a lot different once the Trump administration gets done with it.
As Ross Eisenbrey, the vice president of the Economic Policy Institute, explains:
“They’ll get lobbied by the business community to figure out what [is] an appropriate threshold from their point of view.”
Others, like Littler Mendelson attorney Lee Schreter think the threshold will actually stand pat because, “it becomes hard as an employee-relations matter to take that away.” However, it’s very possible to see the administration issue a new reg to kill the provision in the current regs that indexes the salary threshold to inflation.
