The future of the overtime rule that was supposed to go into effect on Dec. 1 is uncertain, but the chances of the Obama administration and labor activists getting their way on the issue decline with each day the country moves closer to Donald Trump’s inauguration.
The rule, which was finalized by the Department of Labor in May and raises the salary threshold for exempting workers from mandatory overtime pay from $23,660 to $47,476, was put on hold by a federal judge shortly before it was going to take effect.
In his decision, Judge Amos Mazzant not only cast doubt on the new salary threshold but the ability of DOL to set any threshold at all, writing that current law defines overtime exemption based on job duties, not pay.
In its appeal, DOL argued that Mazzant’s ruling was inconsistent with past rulings from higher courts, including the U.S. Supreme Court. Salary level has always been included in the three-part test to determine eligibility for overtime exemption since the Fair Labor Standards Act was passed in 1938, along with salary basis and job duties, they wrote.
While the FLSA does not specifically state that DOL has the authority to determine overtime eligibility based on salary, it does not bar it from doing so, the Obama administration argues. Because the law grants broad rulemaking authority to DOL, it reasons, tying overtime eligibility to salary is legal.
The problem for the new overtime rule is ultimately more political than legal. It is doubtful that DOL will win a reversal in the next two weeks, at which point Trump takes office and will likely abandon the legal battle on behalf of the new rule.
Trump hinted that he opposed the new rule during his campaign, saying that he would at the very least seek an exemption to the increased salary threshold for small businesses. Other Republican leaders, such as House Speaker Paul Ryan, denounced the new rule as a job-killer.