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Labor Department Signals Changes in Overtime

Department says it wants salary to be a factor in overtime eligibility.
July 3, 2017

​WASHINGTON – The U.S. Labor Department suggested last week that it could lower the salary threshold for overtime eligibility set under the Obama administration, Reuters reports.

The news source writes that the department asserted to the New Orleans-based 5th U.S Circuit Court of Appeals its authority to use salary levels to determine which workers are eligible for overtime pay but distanced itself from an Obama administration rule that greatly expanded the number of qualifying workers.

The Labor Department is challenging a November 2016 decision from a federal judge in Texas that blocked the Obama administration’s rule—a rule that the department said could prevent it from setting a new threshold.

Under President Obama, the Labor Department said the salary threshold for workers to receive overtime pay would increase from $23,000 per year to $47,500, which would make about 4 million more U.S. workers eligible to receive overtime. Several states sued to block the rule, before a federal judge in Texas issued an injunction, arguing that only Congress could increase the salary level so drastically, reports The Hill.

Labor Secretary Alex Acosta indicated earlier this year that the department could seek to set a new overtime pay threshold around $33,000.