President Donald Trump’s administration said in a court filing last week that it intends to rethink the controversial new US overtime rule developed by the previous administration last year, the Washington Examiner reports:
Justice Department lawyers … defended the prior administration from charges that it violated the Administrative Procedures Act, which covers federal rulemakings, but also said the current administration would rethink the rule.
“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,” the lawyers stated. Restarting the public question process is a prerequisite before the department can overturn it and establish a new threshold. The Justice Department did not indicate what the administration thought the new level would be.
In the new rule drafted in the final year of Barack Obama’s presidency, the Labor Department had sought to raise the salary threshold at which employees are exempt from overtime pay from $23,660 to $47,476, but the new rule was challenged in court, blocking its implementation and keeping it tied up in litigation until the White House changed hands in January. Trump himself did not stake out a firm position on the rule during last year’s presidential campaign, but his Labor Secretary Alexander Acosta touched on it in his confirmation hearing, saying that the threshold was overdue for an update but expressing concern that doubling it all at once would put undue stress on the economy.
The US House of Representatives on Tuesday passed the Working Families Flexibility Act, a bill that would allow organizations to offer employees the option of 1.5 hours of compensatory time off for each hour of overtime, rather than time-and-a-half pay. Under the terms of the bill, employees must enter such arrangements voluntarily and can “bank” up to 160 hours of comp time to use at their discretion, but employers can refuse to give time off when doing so would unduly disrupt business operations, and can also cap accrued comp time at 80 hours.
Whether this bill will become law remains uncertain, however. A companion bill faces a fierce fight and a potential Democratic filibuster in the Senate, the Hill reports:
Democrats argue that low-wage workers who need the money will feel pressure to take time off to appease their employers. “While they say it’s voluntary and a matter of their choice, as a practical matter, it’s not,” said House Minority Whip Steny Hoyer (D-Md.). He called it the “Freedom to Make Less bill.”
“This bill takes away overtime pay and instead the worker gets a vague ‘IOU’ ” said Rep. Suzanne Bonamici (D-Ore.). Employees who agree to take time off, instead of receiving overtime pay, would essentially be giving their companies a loan, Democrats say.
Opposition to the bill centers on the argument that it doesn’t actually give employees any new benefits, but rather shifts the balance of power in the employer’s direction, Bloomberg’s Josh Eidelson explains:
While the Obama administration’s controversial overtime rule remains tied up in court and appears increasingly unlikely to ever come into effect, Republicans in the US Congress have reintroduced legislation that they say would give both employers and employees more flexibility in terms of compensation for overtime hours. The Working Families Flexibility Act, according to Bloomberg BNA, would amend the Fair Labor Standards Act to allow private employers to offer employees the option of receiving 1.5 hours of compensatory time off for each hour of overtime, instead of time-and-a-half pay.
Employees must enter such arrangements voluntarily and can “bank” up to 160 hours of comp time to use at their discretion, but employers can refuse to give time off when doing so would unduly disrupt business operations, and can also cap accrued comp time at 80 hours. BLR editor Kate McGovern Tornone gives an example of how the bill would change overtime compensation:
Current law: Linda normally works from 9 a.m. to 5 p.m. One Friday evening, she has to work until 6 p.m. and is paid overtime ($7.25 regular rate + $3.63 half time), receiving $10.88 for 1 hour of work. Separately, a few weeks later, she asks to leave at 3:30 p.m. to attend her son’s baseball game. If the employer allows her to leave, she is not paid for those hours.
Proposed amendment: Linda has chosen to participate in the comp-time program so instead of receiving any pay for that Friday overtime hour, she accrues 1.5 hours of PTO. When her son’s game comes around, she requests to use that PTO. If the employer allows her to use it, it pays her at her regular rate for that time, which means she still receives $10.88 for 1 hour of work performed on that previous Friday.
Tornone adds that employees cannot be forced to opt into comp time as a condition of employment, and can cash out accrued comp time at any time for standard overtime pay, which the employer must pay within one month of the request, at either the employee’s current pay rate or their rate at the time the PTO was accrued, whichever is higher.