Punching In: What’s Next for the Labor Department’s OT Rules

Monday morning musings for workplace watchers

Overtime Policy Overhaul| Pulling Demographic Reports

Parker Purifoy: The 2024 overtime rule officially died last week. But the question remains if the Department of Labor will do anything further with the standard.

The DOL’s technical amendment to its regulation on who qualifies for time-and-a-half wages withdrew the Biden-era policy which, if it had gone into effect, would have made four million more workers eligible for overtime.

It raised the exemption threshold to $58,656 for white-collar workers but was struck down by two Texas federal judges who found the move to be beyond the department’s authority.

Jim Paretti, an employer-side attorney with Littler Mendelson PC, said the decision to formalize the rule’s nullification didn’t change things for employers. But, he said, it did raise questions about whether the DOL, under acting Labor Secretary Keith Sonderling, would work to put their own stamp on the regulation.

Last week’s rescission put back in place the final rule from 2019 setting the salary threshold at $35,568.

The move comes after the Trump administration pushed heavily for no taxes on overtime wages or tips in 2025.

The department may feel more constrained in blazing new territory because of those 2024 court orders and similar legal challenges to the Obama-era attempt to raise the salary threshold.

But the DOL could examine the work-duties portion of the test exempting an employee if they’re a “bona fide executive, administrative, or professional.” That portion of the test hasn’t been substantially updated in many years, Paretti said.

“But changing the duties test would be fundamentally changing the nature of the exemption,” he said. “So whether they have the taste for that, we’ll see.”

Worker advocates decried the rescission. Liz Shuler, president of the AFL-CIO, said in a statement that the move was “unsustainable for the country.”

“The Trump administration just told 4 million workers they don’t deserve to be fully paid for the hours they work,” she said. “Costs are rising, everything is too expensive, and this administration wants to keep wages as low as possible.

Paul Sonn, state policy program director at the National Employment Law Project, also pointed to rising costs of living.

“This short-sighted action is only going to worsen the affordability crisis. And gimmicks like Trump’s ‘no-tax-on-overtime’ are of little benefit to workers who are stripped of their overtime pay rights,” he said in a statement.

The U.S. Department of Labor headquarters in Washington

Rebecca Klar: The Equal Employment Opportunity Commission submitted a regulatory plan for White House review that would withdraw workforce demographic disclosure requirements for many private companies, as well as for unions, schools, and local governments.

The sweeping rescission proposal hasn’t been published yet in full. So far it doesn’t appear targeted toward a segment of the workforce that’s gotten a lot of attention from the Trump administration: federal employees.

At least one prominent administration official has spoken on this issue.

Consumer Financial Protection Bureau acting Director Russell Vought told the EEOC that its annual call for agencies to submit data on their workforce’s demographics conflicts with President Donald Trump’s anti-DEI executive orders.

Vought, also director of the White House Office of Management and Budget, urged the agency to review and revise its report in a message shared publicly along with the CFPB’s submission of its annual MD-715 report.

MD-715 is the management directive requiring federal agencies to submit data on their workforces by race, ethnicity, and sex, as well as EEO programs that, in part, show a proactive prevention of discrimination.

Republican EEOC Chair Andrea Lucas has broadly acted in coordination with the Trump administration’s broader efforts to scrutinize diversity, equity, and inclusion programs in the federal government and private sector.

Given Vought’s proximity to the White House as OMB director and the EEOC’s actions in lockstep with the administration, shifts in the EEOC’s demographic data collection for the federal workforce could be down the line when the agency renews its forms for the process, said Fred Satterwhite, a principal consultant with DCI.

“It’s not like the EEOC has been a rogue part of the executive branch and CFPB had to point out to them they were disobeying,” Satterwhite said.

Vought’s message said that certain aspects of MD-715 appear to conflict with Trump’s orders, such as asking agencies to report whether their EEO policy statement addresses “gender identity” as a protected basis, and whether their strategic plans reference “diversity and inclusion principles.”

MD-715 has been in place for more than two decades, with earlier forms of similar collections dating back to the 1980s before it, Satterwhite said.

The commission must renew its data collection process every few years by submitting it to the Office of Information and Regulatory Affairs, part of Vought’s OMB.

The current approved version of management directive is set to expire at the end of September, Satterwhite said.

“This may flow into future activity by the EEOC as part of ongoing synchronization between the commission and the White House,” he said.

The EEOC’s notice Thursday also includes proposed rescissions to reporting requirements under Title VII of the 1964 Civil Rights Act, but it’s not clear if that will directly impact MD-715.

An EEOC spokesperson didn’t respond to a request for comment.

We’re punching out. Daily Labor Report subscribers please check in for updates during the week, and feel free to reach out to us.