The Department of Labor under President Trump plans to develop its own rule regarding overtime pay rather than continue a legal battle to enact a rule proposed under the Obama administration, government attorneys said in a brief filed Friday in federal appeals court.
The Obama-era overtime rule would have doubled the salary threshold — from $23,660 to $47,476 per year — under which most salaried workers would be guaranteed overtime pay when they work more than 40 hours per week. It was opposed by several associations representing senior living operators.
The rule, finalized in May 2016, was set to take effect Dec. 1, but the U.S. Chamber of Commerce, several states’ attorneys general and other national and state business groups filed legal challenges. A judge issued a preliminary injunction in November, and soon after, the Labor Department filed an appeal.
In Friday’s brief, however, government attorneys said: “The Department has decided not to advocate for the specific salary level ($913 per week) set in the final rule at this time and intends to undertake further rulemaking to determine what the salary level should be. Accordingly, the Department requests that this Court address only the threshold legal question of the Department’s statutory authority to set a salary level, without addressing the specific salary level set by the 2016 final rule.”
In a June 27 press release, the Department of Labor said it already has a request for information related to the overtime rule to the Office of Management and Budget for its review. “When published, the RFI offers the opportunity for the public to comment,” the department said.
Chamber: Some employers can’t pass along increases
An addendum to Friday’s brief included a Sept. 4, 2015, letter that the U.S. Chamber of Commerce had sent to the Labor Department arguing that healthcare companies would not simply be able to raise prices should the overtime rule go into effect, as companies in some other industries might be able to do.
“Many employers in the healthcare industry depend on reimbursements from Medicaid, Medicare and private insurance — which will not increase just because the department raises the salary level for exempt employees,” the letter stated, later adding: “The only option for non-profit, government and healthcare employers is to reduce services by decreasing headcount and hours worked. For healthcare employers, however, reducing services often is not an option either because of laws requiring a minimum level of service. Thus, employers in these sectors will face significant hardships, and the people who rely on their operations will be forced to go without these services.”
At the time the comments were made, the U.S. Chamber listed among the members of its board of directors Paul Klaassen, founder of Sunrise Senior Living.