The clock is ticking. Will the Labor Department appeal a judge’s recent decision that could deny overtime pay to millions of Americans? Labor Secretary Alexander Acosta has been clear that he doesn’t like the Obama administration’s overtime rule, insisting that he wants to reconsider it and possibly make one of his own. But he needs to appeal the judge’s decision regardless, otherwise he’s creating uncertainty that isn’t good for anyone.
This summer, the Labor Department issued a formal “request for information” to get public feedback on which white collar employees should get overtime pay. The Obama rule, which we worked closely on, would have raised the “overtime threshold” to ensure that white collar workers making less than $47,476 per year got overtime, giving 4.2 million workers greater protections.
In August, a federal judge in Texas purported to invalidate the Obama overtime rule in a far reaching and frankly unworkable decision. The judge didn’t just overturn the Obama rule, he also created a nearly impossible test for any future overtime rule to pass. His problem with the Obama rule was that it made some workers automatically eligible for overtime based only on their salary, but that is exactly what every other new overtime rule has done since 1940 and exactly what the overtime threshold is supposed to do. He also misunderstood how the Obama rule worked, reasoning that it made job duties irrelevant. But in reality, job duties would still determine overtime eligibility for 6.5 million workers under the Obama rule.
Most importantly, the judge was concerned that the Obama rule gave 4.2 million workers new overtime protections, even though their jobs had not changed. There’s no basis in this law for invalidating the rule simply because of its impact. Even as a policy, the judge didn’t recognize that the 2016 rule’s greater impact was created by errors in a 2004 version of the rule, which made too many workers ineligible to get overtime.
Moreover, overtime rules always protect some new workers. Although the judge attempted to limit his ruling to the 2016 rule, the 2004 rule similarly affected 1.3 million workers. His analysis therefore calls into question the Labor Department’s ability to use any realistic salary level test as part of its criteria for determining overtime eligibility.
Secretary Acosta is a lawyer and former law school dean. He surely understands the implications of this decision for any future overtime rulemakings, and by extension, the greater uncertainty it creates for businesses and workers around the country. In a time of rising income inequality and stagnating middle class wages, the question of who is entitled overtime is important for America’s workers and for restoring balance in our economy. It isn’t a time to leave workers in limbo, but time is running out for the Labor Department to act.
Even if Secretary Acosta wants to reconsider the Obama rule, he has to appeal the judge’s decision in order to clear the regulatory path to a new rule. He needs to ask the court of appeals to clarify the rules of the road for overtime regulations. Otherwise, any rule the Labor Department puts out will be vulnerable to a legal challenge on the basis of this decision. If the Labor Department doesn’t appeal, it would be setting in motion a new rulemaking that it knows would fail under the reasoning of this decision.
If Secretary Acosta doesn’t appeal, he’ll be sending a clear signal to the American people that he doesn’t value their right to overtime pay when they are required to work long hours, giving up time with their families. If the Labor Department fails to issue a new rule, or issues one that is predictably knocked down as contrary to the judge’s ruling, the overtime threshold will be stuck where it is now and has been since 2004, at less than $24,000. That means that employers can pay poverty wages and require people to work 50 hours, 60 hours, or more per week without paying them any more than they earn for their first 40 hours.
The Obama administration told 4.2 million people that it thought the law gave them a right to overtime. That gives Secretary Acosta 4.2 million reasons to appeal the judge’s decision and take seriously the task of updating our nation’s overtime rules.
Patricia Smith served as U.S. Solicitor of Labor during both terms of the Obama administration, capping more than 40 years in public service. She is now a senior counsel focusing on workplace protections at the National Employment Law Project.
Sharon Block served as counselor to U.S. Secretary of Labor Tom Perez and led the policy office at the U.S. Department of Labor during the Obama administration. She is now executive director of the labor and worklife program at Harvard Law School.
Read the original op-ed on The Hill.
