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Department of Labor backs off overtime changes

Employer groups, wary of potential labor cost increases, praise move

The U.S. Department of Labor is backing off a rule that would have greatly increased the number of restaurant managers eligible for overtime pay, as the Trump administration continues to undo Obama-era regulations. 

In a brief filed in a lawsuit against the federal government over the rule, the department said it “decided not to advocate for the specific salary level ($913 per week) set in the final rule.” The department indicated it would examine what the salary level should be.

The brief followed the department’s request to the Office of Management and Budget for more information on the overtime rule, suggesting the Department of Labor was backing off the regulation.

Employer groups praised the move. They had been critical of the proposed changes in overtime regulations, saying the higher threshold would have greatly increased labor costs. 

“It’s great to see the Department of Labor finally taking the time to fully evaluate the impact its regulations will have on businesses,” Angelo Amador, executive director of the National Restaurant Association’s Restaurant Law Center, said in a statement. “Secretary [Alexander] Acosta has once again proven he is a thoughtful leader who will work in the best interest of the American worker.”

Last year, the department doubled the pay threshold for which managers would qualify as exempt from overtime regulations, from $23,660 a year to $47,476. Such an increase would have likely hit numerous restaurant chains that classify assistant managers as exempt — such managers frequently work 50 hours a week or more. 

A federal judge in Texas froze the rules in November, after President Donald Trump was elected, delaying their implementation. 

The administration has been working to unravel a number of Obama-era regulations. This week, a pair of appointments to the National Labor Relations Board was seen as likely reversing the agency’s moves to classify franchisors as “joint employers” of workers hired by their franchisees.

“Today’s decision by the Trump administration to not defend the Obama administration’s job-killing mandate on overtime pay is a much-needed step toward repealing the misguided regulation,” Trey Kovacs, a labor policy expert with the conservative-leaning Competitive Enterprise Institute, said in a statement.

The move doesn’t mean that the threshold won’t increase, however. Acosta told a Senate panel this year that he would consider raising the threshold to $30,000 to keep up with inflation, according to the Associated Press.

Contact Jonathan Maze at [email protected]

Follow him on Twitter: @jonathanmaze

TAGS: Legal
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