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Trump administration moves closer to undoing overtime pay rule

July 25 (Reuters) - The Trump administration on Tuesday pushed forward with its bid to undo an Obama administration rule to extend mandatory overtime pay to 4.2 million workers and said it was considering treating workers differently based on location and industry.

The rule, which was supposed to take effect in December 2016 but was blocked by a federal judge, is a top target for business groups that say it would force employers to convert many salaried employees into hourly workers.

The U.S. Department of Labor on Tuesday called for public comments on the rule, which is the first step in revoking or revising it.

The rule would have doubled to $47,000 the maximum salary a worker can earn and still be eligible for mandatory overtime pay under federal wage law. A group of 21 states and business groups including the U.S. Chamber of Commerce challenged the rule in a lawsuit filed last year.

The Labor Department appealed the judge's decision temporarily blocking the rule to a New Orleans-based U.S. appeals court weeks before President Donald Trump took office in January.

Earlier this month, the department defended its power to base overtime eligibility on workers' salaries in a brief submitted to the court. But the agency made clear that it did not agree with the threshold set by the Obama administration.

On Tuesday, the department said in light of the pending appeal, it decided to issue a request for comments rather than skip immediately to rescinding or revising the rule.

The agency asked for input on whether the current threshold of $23,660 set in 2004 should be updated for inflation, and whether there should be multiple levels based on region, employer size, industry or other factors.

Workers' rights groups criticized the Trump administration for moving to change the rule, with some noting that the Obama administration reviewed 300,000 comments before setting the salary threshold at $47,000.

Working people should not have to wait another day for government to be on their side," Christine Owens, executive director of the union-backed National Employment Law Project, said in a statement on Tuesday.

The department also asked employers to explain how they prepared for the rule to take effect and whether it has had an outsize impact on small businesses and particular industries.

The department said it was considering eliminating the salary threshold, leaving overtime eligibility to be based on workers' job duties. (Reporting by Daniel Wiessner in Albany, New York, editing by Alexia Garamfalvi and Cynthia Osterman)