Some updates from the past week on the status of the federal overtime rule and funding for Seattle’s Office of Labor Standards (OLS):

First, yesterday a federal judge stopped the Obama administration’s new overtime rule, which was scheduled to go into effect Dec. 1. Several states had challenged the rule in court. The judge granted a preliminary injunction in the case because, according to the AP, the “Department of Labor's rule exceeds the authority the agency was delegated by Congress.” A week ago I wrote about what the new administration could do to change the rule—that is all now moot.

Second, on Monday, the Seattle City Council approved the 2017–18 city budget. One item that was considered during the budget negotiations was whether to fund the city’s Office of Labor Standards (which enforces ordinances like the minimum wage) with a dedicated fee (or tax) on business. I wrote about the issue back in June. As passed by the Council, the city budget continues to fund the OLS through the general fund.

PubliCola writes that the proposed dedicated fund for the OLS was rejected by the budget committee last week by one vote. But this may not be the end of the idea. Councilmember Rob Johnson voted against it because there wasn’t enough outreach, but he supports the general idea. According to PubliCola, he went so far as to say,

If we can’t get to that [an agreement by the first quarter of 2017] I commit to you council member Herbold that I will happily vote for a dedicated revenue stream in 2017 over opposition by business or labor. But I want to give us a little time to figure out if we can get that coalition together to agree on a revenue source.

Additionally, PubliCola reports that attorney Robert Mahon looked at the proposal and argues that the fee is really a tax: “The distinction is significant because there are constitutional and state limits on city taxes . . . .” And,

Mahon argues that despite the fact that the proposal explicitly states the revenue would be used to cover the costs of regulating businesses, the historical context indicates that Herbold’s idea is “a resurrection of the head tax.”

Update: After posting the above, I saw that PubliCola ran an op-ed from another attorney yesterday arguing that the proposal is a fee and not a tax. This question will come up again if the proposal moves forward in the future.