On Dec. 1, an estimated 4 million workers will become eligible to earn overtime under the Department of Labor’s overtime rule. Introduced May 18 by the Obama administration, the rule will raise the salary threshold for exempt workers to $47,476 from $23,660 per year—if nothing stands in its way, that is. The overtime rule is currently facing a federal litigation challenge, and in the coming days, the federal court could choose to enjoin the rule, according to Ryan Glasgow, Hunton & Williams labor and employment lawyer. “That would obviously change the dynamic immediately,” he says.
But if the rule takes effect without a hitch, will the Trump administration block its success? Glasgow says it is unlikely. Because of the timing of the overtime rule, it will be in effect for nearly two months before President-elect Trump is inaugurated. At that point, it would be a months-long process to reverse what is already set in place.
“I think that the interesting decision he’s going to need to make is in late January or sometime in February—does he want to undo the salary increase that went into effect Dec. 1? By then, employers will have made changes, people who received increased salaries as a result of that are going to be enjoying that, and candidly, Trump may decide that it’s not a politically popular move to reverse courses on the salary level,” Glasgow explains. “To take the salary away, to convert people back to non-eligible overtime status, even if the law allows it—it’s going to be hard to do it from an employer relations standpoint.”
If Trump makes any changes to the overtime rule, Glasgow suspects he will spend his regulatory energy to reverse the triennial updating aspect of the rule, which would require an automatic increase in the threshold salary level every three years based on the 40th percentile for salaried workers in the lowest wage region.