Alexander Acosta, President Trump’s pick to head the Labor Department, told senators Wednesday that it was “unfortunate” that the threshold for when workers are due overtime pay went unadjusted for more than a decade before it raised last year by the Obama administration.
However, he indicated that former Labor Secretary Tom Perez may have placed the new threshold higher than his authority allowed.
“I am very sensitive to the fact that it hadn’t been updated since 2004,” said Acosta, the dean of Florida International University Law School, in response to questions from members of the Senate Health, Education, Labor and Pensions Committee. He indicated that the threshold should have been raised at some point prior to last year but declined to say exactly what the new level should have been.
Federal law says employees must be paid time and a half once they work more than 40 hours in a week. However, businesses may exempt workers from the requirement if their duties are “managerial” in nature and they reach a certain salary threshold.
In May, the Labor Department announced that threshold, previously $23,000 annually, would rise to more than $47,000 on Dec. 1. Many Republican lawmakers and business groups opposed the move, arguing that the change exceeded the department’s authority. A Texas judge threw out the rule last year, and the issue is still in court.
Acosta indicated that he thought the rate should be higher but that raising it to that $47,000 level caused a “stress on the system.” The question of where the rate should be was a “very difficult decision,” he said.
