This past November, a Texas federal judge derailed the Department of Labor’s efforts to implement a new federal overtime rule by issuing a preliminary injunction just days before the rule was to go into effect. The rule would have doubled the FLSA’s salary threshold to qualify for the exemption from overtime pay. On December 1, 2016, the DOL lodged an appeal of the court’s injunction to the 5th Circuit Court of Appeals.
With President-Elect Trump’s inauguration just days away, many have questioned what will happen to the overtime rule once the new administration is in office. Mr. Trump has given a clue by nominating Andrew Puzder as his pick for labor secretary. Mr. Puzder has been an outspoken critic of increasing the minimum wage. While the Trump transition team has not issued a concrete statement about the future of the overtime rule, the nomination of Mr.
Puzder gives us some indication of the new administration’s attitude. In a guest post in Forbes magazine, for example, Mr. Puzder wrote, “the new rule will simply add to the extensive regulatory maze the Obama Administration has imposed on employers, forcing many to offset increased labor expense by cutting costs elsewhere. In practice, this means reduced opportunities, bonuses, benefits, perks and promotions.”
As head of the Department of Labor, Mr. Puzder may well persuade the administration to withdraw the pending 5th Circuit appeal, and the DOL’s defense of the rule, and let the injunction stand. By doing so, the Trump administration would effectively kill the proposed regulation, or at the very least, delay its implementation, or the implementation of something like it, for the foreseeable future.
For more information, contact SS+D’s Labor and Employment Practice Group at firstname.lastname@example.org, in our Dayton office at 937.222.2052 or in our West Chester office at 513.644.8125.