Description: On August 31, 2017, Judge Amos Mazzant, in the U.S. District Court for the Eastern District of Texas, held that the Obama-era Overtime Rule’s salary level exceeded the Department of Labor’s authority, and concluded that the Overtime Rule is invalid. On October 30, 2017, the Department of Justice, on behalf of the Department of Labor, filed a notice to appeal Judge Mazzant’s decision to the Court of Appeals for the Fifth Circuit.
Fair Economy Impact: One reason Americans’ paychecks have not been keeping pace with their productivity is the erosion of labor standards. Case in point: the overtime threshold had been allowed to erode so dramatically that front-line managers who earn $23,660 a year – which is below the poverty level for a family of four – could be asked to work overtime hours without any additional pay. In 2016, the Department of Labor updated the overtime rule that requires employers to pay workers time-and-a-half if they work more than 40 hours per week. The updated overtime rule, which went into effect on December 1, 2016, raises the threshold below which salaried workers are automatically eligible for overtime pay to $47,476, up from $23,660. The 2016 overtime rule will directly benefit 12.5 million working people.
While it is a step in the right direction for the DOL to appeal, the DOL should not be taking action to undo the rule or lower the salary threshold. But when the DOL announced its appeal, it also signaled that it would be weakening the rule by adjusting the salary threshold. If the DOL lowers the salary threshold below the 2016 salary level, then the Trump administration will be again siding with corporate interests over workers.