The attorneys for the USDOL advised the federal Fifth Circuit Court of Appeals that the agency does intend to revise the currently pending changes to the overtime regulations.  The lawyers also requested that the Court approve of the agency’s right to use salary levels to determine exemption status.  The case is entitled Nevada et al v. USDOL and is being heard in the Fifth Circuit.

The lawyers requested “that this Court not address the validity of the specific salary level set by the 2016 final rule ($913 per week), which the Department intends to revisit through new rulemaking.” In lieu of such a holding, the DOL wants the Court to acknowledge that the USDOL possesses the authority to establish a salary minimum; if a salary is less than that amount, the employees would be automatically entitled to overtime for actual hours worked exceeding forty (40).

A federal district court Judge stayed the rule last year.  The lower court found that the agency emphasized salary levels too much, rather than the job duties performed, in determining exempt status under the proposed revision.  The new Secretary of Labor, Alexander Acosta, stated during his confirmation hearing that this decision seemed to question whether the agency had the power to set a salary threshold.

The DOL has submitted a request for information on the overtime rule to the Office of Management and Budget.  This action suggests that the DOL is prepared to reconsider the pending regulation.  Mr. Acosta hinted that he could envision the current $24,000 salary threshold rising to the low $30,000 range.  The rule, as currently constituted, is estimated to make another four million people eligible for overtime.

The Takeaway

This is an interesting development.  Perhaps the Court will be guided by the government’s arguments and toss this hot potato back to the agency to establish a new (and more business friendly) salary threshold.

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