On Friday the U.S. Labor Department defended its authority to use salary levels to decide who was eligible for overtime pay.
Under U.S. President Donald Trump, the Labor Department has continued to fight a challenge to an Obama administration-era rule to raise the pay threshold for overtime eligibility.
The Labor Department told a federal appeals court on Friday it had the power to use salaries to set thresholds for mandatory overtime pay, without advocating for the $47,500 maximum salary level set by the department under Obama.
The Labor Department is challenging a November decision from a federal judge in Texas that blocked the Obama rule, a decision that the department said could prevent it from setting a new threshold below that set by the Obama administration.
The Obama rule was expected to extend overtime pay eligibility to more than 4 million salaried workers. Nevada and 20 other states sued last year to block the rule.
Business groups criticized the increase as too drastic and costly, potentially forcing employers to convert salaried workers to hourly wages.
Trump’s Labor Secretary R. Alexander Acosta said during his confirmation hearing in March that the correct threshold might be around $33,000. The Labor Department took initial steps earlier this week to begin developing a new threshold.
In its Friday brief to the New Orleans-based 5th U.S Circuit Court of Appeals, the Labor Department made it clear it did not support the salary threshold developed under Obama. The department then told the court it was “reluctant” to move forward with the rulemaking necessary to set a new threshold as long as its authority was in question.
Nevada and the other states have said that the use of a salary threshold to determine overtime eligibility has been controversial for decades, but appeals courts allowed it because it had been set low enough to exempt management workers.
According to the states, the Obama administration rule is far more drastic, expanding overtime pay to tens of thousands of state employees.
Under the Fair Labor Standards Act (FLSA), most employees must be paid at least minimum wage for regular work hours and receive overtime pay when total weekly hours reach more than 40. The state of Florida follows the overtime rules of the FLSA, time and one half regular pay rate for all hours worked in excess of 40 in a regular work week. Overtime can be calculated by taking your regular rate of pay and multiplying it by 1.5.
As it stands currently, job titles do not determine eligibility for overtime pay. Wages, duties and occupations decipher whether one can be paid overtime. Right now, any employee that makes a yearly salary of less than $23,600 can be awarded overtime pay. Non-management employees performing manual labor or repair, secretarial, kitchen or clerical work are usually entitled to collecting overtime pay. With several exceptions, all hourly paid employees should be entitled to overtime. Most commission-based workers can be awarded overtime as well. Salaried employees that earn less than $455 per week are entitled to overtime. Salaried employees that earn more than $455 per workweek can receive overtime unless their job duties earn them exemption like executive, professional, administrative, outside sales or computer-related occupations.