What Does Puzder Stepping Down Mean For The Fate Of Labor Dept.'s Overtime Rule?

Labor secretary nominee Andrew Puzder has become the latest Trump administration casualty. Puzder, CEO of CKE Restaurants, withdrew his name from consideration for the position on Wednesday amid criticism over his past employment of an undocumented housekeeper.

The withdrawal comes on the heels of the resignation of Trump’s national security adviser, Michael Flynn, earlier this week. Flynn has been accused of having potentially illegal conversations with the Russian ambassador about the possibility of lifting U.S. sanctions.

The Situation

The exits have the Trump administration reeling from a political standpoint, but many U.S. workers are happy to see Puzder go. Puzder has repeatedly opposed minimum wage increases and has suggested eliminating the Obama administration’s new overtime law. The law doubled the salary threshold under which workers must receive time-and-a-half pay for overtime hours. That threshold currently stands at $47,476.

Back in May, Puzder called the overtime rule “another barrier to the middle class rather than a springboard.”

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Puzder has also argued that a higher minimum wage would encourage employers to replace human employees with automated technology.

“If you’re making labor more expensive and automation less expensive—this is not rocket science,” he said.

The Aftermath

While minimum wage employees and many Americans working overtime hours are likely cheering Puzder’s withdrawal, it’s unlikely his replacement will differ significantly from Puzder’s position on overtime. President Donald Trump himself has said that “rolling back the overtime regulation is just one example of the many regulations that need to be addressed.”

A federal judge in Texas recently delayed the implementation of the overtime rule and indicated that he will likely block it. Regardless of who Trump chooses to replace Puzder, it’s unlikely the Justice Department will challenge the judge’s ruling.

U.S. investors certainly don’t seem concerned about potential drama in Washington. The SPDR S&P 500 ETF Trust SPY is up 1.4 percent so far this week.