President Trump’s pick for Secretary of Labor, CKE Restaurants CEO Andy Puzder, withdrew his nomination in February 15. The withdrawal comes after controversies over his employing an undocumented immigrant to clean his home and abuse allegations from his ex-wife. Now, Alexander Acosta became President Trump's new pick to lead the Labor Department.
Trump’s original choice for labor secretary, fast-food executive Andy Puzder, was a vocal opponent of Obama’s reforms. It’s unclear where Trump’s new nominee, Alexander Acosta, stands on the issue.
Millions of Americans pay or workload may have changed for good due to the overtime rules. But the reforms are now tied up in court and face a dim future under Trump, whose administration is rapidly peeling back regulations on corporations. The new, business-friendly White House could decline to defend the reforms on appeal ― making it more likely they will die a slow death ― or choose to replace them with something more palatable for employers and less generous to workers.
If the reforms don’t survive in some fashion, a status quo will prevail in which hardly any Americans who work on salary qualify for overtime pay. It wasn’t always so. In 1975, an estimated 62 percent of salaried workers were covered by overtime law. But that figure has fallen to around 8 percent, as employers take advantage of regulations that haven’t been updated over time. As a result, overtime pay has become a foreign concept to an entire generation of salaried workers.
Under the Fair Labor Standards Act, hourly workers are entitled to time-and-a-half pay for any hours beyond 40 in a week, but the picture is more complicated for employees on salary. Whether or not they get overtime depends on how much they earn and what their job duties are. When workers are exempted from the law, companies can force them to work 60, 70, or even 80 hours a week without paying anything extra for it.
If the Trump administration does not defend Obama’s reforms, worker groups could end up defending them instead. If so, an appeals court could find Obama’s reform lawful, paving the way for it to be implemented. If not, states could still end up fashioning their own rules that take the place of federal ones, much like the minimum wage: California and New York already have their own regulations on overtime.
If Trump’s team put forward a rule with a lower salary threshold, which could placate business groups enough to prevent a legal challenge, while still bringing some workers new protections. Let’s wait and see whether 2017 will witness a minimum wage increase and federal labor law poster update in Trump presidency. And Trump may feel sufficient political pressure to replace Obama’s rule if he allows it to wither. After all, he promised higher wages for working-class Americans throughout his campaign.