Federal Court Strikes Down DOL Overtime Rule; AICPA Reiterates Opposition in Business Coalition’s Comment Letter

The American Institute of CPAs (AICPA) was a signer of the Partnership to Protect Workplace Opportunity’s (PPWO) recent comment letter opposing the U.S. Department of Labor’s (DOL) overtime rule.

The PPWO is a diverse group of associations, businesses, non-profits and other stakeholders representing employers with millions of “white-collar” employees across the country in almost every industry who were (or who would have been) impacted by DOL’s 2016 rule.

The comment letter followed a federal court’s ruling invalidating the Obama administration rule that would have extended mandatory overtime pay to more than 4 million U.S. workers. On August 31, the federal court for the Eastern District of Texas determined that DOL had overstepped its authority under the Fair Labor Standards Act (FLSA). In response, Secretary of Labor Alexander Acosta directed the Department to review the rule and sought public comment.

The PPWO’s September 25 letter reiterated concerns with the Obama Administration’s radical update to the overtime rules. The PPWO argued a more historical methodology should be utilized as the Department seeks to review and potentially re-propose the rule. Specifically, the letter calls on the department to consider using the same methodology as was used in 2004 (the previous effort to update the rule) as it moves forward.  Further, the letter argued that no changes should be necessary to the duties test, especially if the 2004 methodology is used to update the salary threshold. 

Under the now overturned rule, the standard salary level exemption under the FLSA would have increased from $455 per week to $913 per week (from roughly $23,660 per year to $47,476 per year) and implemented an automatic update of the threshold every three years without congressional review.