President Donald Trump’s Department of Labor (DOL) took steps to overhaul former President Obama’s overtime rule Monday, sending a formal Request for Information (RFI) related to the rule to the Office of Management and Budget (OMB).
Once OMB reviews the request and it’s published, the public will have an opportunity to comment on the rule, which would more than double the salary threshold under which employees must be paid overtime from $23,000 to $47,000.
“That was a bad rule,” Tennessee Republican Sen. Lamar Alexander told Labor Sec. Alexander Acosta Tuesday. He cited the drastic salary threshold increase, “47,000 just too high for many parts of the country and it would be wise to consider a different top level for different parts of the country.”
The rule, championed by Obama’s DOL, would raise the salary threshold for workers to qualify as exempt from overtime pay requirements from $455 to $913 per week (or from $23,660 to $47,476 per year), and increase the current minimum salary requirements for employees exempt from overtime pay under the “highly-compensated” exemption from $100,000 to $134,004 per year.
A federal judge blocked the rule from going into effect Dec. 1, 2016 by issuing an injunction. Opponents to the rule argued that Obama’s DOL failed to consider regional salary and economic differences in setting the nationwide base pay rate.
Alexander also said that the overtime rule, as written, would cause enormous harm to non-profits and universities who would have to raise tuition rates in order to accommodate it. He urged Acosta to show the committee a “good” overtime rule.
Acosta, speaking before the Senate Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies on DOL’s 2017 budget request, addressed Alexander’s concerns.
Citing Tuesday’s RFI, Acosta said that once approved by OMB, the request would ask the public to comment on “a number of questions that would inform our thinking with respect to the issues that you [Alexander] raised.”
Proponents of the overtime rule concede that the RFI likely means a change to the Obama-era rule. “They are hoping to get information that they can use as legal justification for putting out a new rule that will have a lower threshold,” Heidi Shierholz, an economist at the liberal Economic Policy Institute told The Hill in early June.
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