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New Labor Secretary Acosta Expected to Act on Stalled Final Overtime Rule

The Senate has confirmed Alexander Acosta for Secretary of Labor. What does this mean for the Final Overtime Rule? Here's what we know.
Alexander Acosta to act on Final Overtime Rule

The Senate has confirmed Alexander Acosta for Secretary of Labor — one of the final members of President Trump’s cabinet.

Now, the business world wonders where the new Secretary stands on the stalled Final Overtime Rule. The Obama-era rule, originally set to take effect Dec. 1, 2016, was temporarily blocked Nov. 22, 2016, by a federal court in Texas.

If implemented, the DOL’s rule would:

  • Raise the salary threshold for employees exempt from overtime pay under the executive, administrative, and professional (EAP) white collar exemptions from $455/week to $913/week — that’s $47,476 for a worker who works the whole year;
  • Raise the annual salary for the Highly Compensated Employee exemption from $100,000 to $134,004; and
  • Create a mechanism for automatic updates to the salary threshold for the EAP white collar exemptions and HCE annual salary every three years, based on wage growth over time.

The DOL estimated the Final Overtime Rule would make about 4.1 million workers newly eligible for overtime pay when they work more than 40 hours a week. Another 100,000 workers would receive raises, putting their earnings above the new salary threshold.

Acosta Offers Little Insight into His Position on Key DOL Initiative

During his Senate confirmation hearings, Acosta, a former U.S. Attorney for the Southern District of Florida, an assistant attorney general for the Department of Justice Civil Rights Division, and National Labor Relations Board member, declined to state a position on the fate of the Final Overtime Rule. Although he didn’t provide a lot of insight into his next steps during the Senate hearings, Acosta did indicate that while he thought the salary thresholds in the Final Overtime Rule currently enjoined in the courts would be very difficult on the economy, the current salary thresholds didn’t account for inflation. Acosta also shared that he would be consulting with the Department of Justice to confirm what power the DOL actually had to change or even issue salary thresholds as they were not included in the original FLSA statute. As a result of the DOL’s latest and third such request to delay the delivery of their next filing in their appeal of the injunction of the Final Overtime Rule, Acosta has until June 30 to determine next steps.

Trump nominated Acosta (most recently the dean of Florida International University’s law school) for Secretary of Labor after his first choice, Andrew Puzder, withdrew following opposition from Senate Republicans. The late confirmation meant Acosta was unable to provide recommendations around the agency’s budget needs in advance of the President’s budget proposal, as well as a need for the Secretary to act quickly with regard to additional appointments, including a director for the OFCCP.

The new Secretary was sworn in by Vice President Pence on April 28, 2017.

Tammy Tyler

Tammy Tyler is an employment law compliance manager at Paychex, Inc., a leading provider of integrated solutions for payroll, HR, retirement, and insurance services.

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* This content is for educational purposes only, is not intended to provide specific legal advice, and should not be used as a substitute for the legal advice of a qualified attorney or other professional. The information may not reflect the most current legal developments, may be changed without notice and is not guaranteed to be complete, correct, or up-to-date.

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