The White House detailed the final version of a rule Tuesdayaimed at expanding overtime privileges to millions of more workerscurrently unqualified.
President Barack Obama has sought to change federal regulationsso more workers can qualify for overtime. The Department of Labor(DOL) will officially release the final version of the ruleWednesday. Executive or manager positions currently cannot qualifyfor overtime if they have a salary of $23,660 annually. The newrule will raise the exemption threshold to $47,476 annually.
“Over the past 40 years, overtime protections eroded as a resultof inflation and lobbyists’ efforts to weaken them,” the WhiteHouse detailed in a statement provided to The Daily Caller NewsFoundation. “That’s why tomorrow, the Department of Labor isfinalizing a rule to update overtime protections so they can helpmillions more Americans.”
The White House adds the updated rule will help restore overtimeprivileges which have dwindled over the decades. It notes the shareof full-time salaried workers that qualifying for overtime hasplummeted from 62 percent in 1975 to 7 percent today despite wageand job growth in recent years. The White House alsoreleased a video explaining the new rule.
“Additionally, this new level will be automatically updatedevery three years to ensure that workers continue to earn the paythey deserve,” the White House continued. “Increasing overtimeprotections is another step in the President’s effort to grow andstrengthen the middle class by raising Americans’ wages. Thisextra income will not only mean a better life for Americanfamilies.”
The Department of Labor (DOL) released a draft version of therule in June, 2015, which was met with criticism from somelawmakers and business coalitions. The drafted version of therule increased the exemption threshold to about$52,000 annually. The final version has a slightly less drasticincrease and a longer phase in period for employers to comply.
Business groups speculating on the final rule May 15 noted anexemption threshold in the $47,000 to $48,000 range would still bedamaging to employers. Business experts warn employers could beforced to reduce their salaried staff to overcome the added cost oflabor. Those working in salaried position could be reclassified ashourly resulting in less flexibility and chances foradvancement.
Republicans Sen. Tim Scott and Rep. Tim Walberg introducedlegislation March 17 over concerns the rule change could hurt the very workersit’s meant to help. Their legislation would require the departmentto conduct a thorough economic analysis before releasing a finalversion of the rule. A coalition of conservative groups wrote a letter Tuesday insupport of the opposition bill.
The Fair Labor Standards Act of 1938 is what establishes overtime protections among otherrules like the minimum wage. The overtime exemption threshold hasbeen increased on numerous occasions in the past to keep pace withinflation but never at such a drastic rate.
Republicans also issued a stern letter to federal laborofficials Feb. 9 expressing their concerns. The letter was signedby 112 Republicans and two Democrats. The DOL provided businessesand lawmakers 60 days to comment when it first released the draftedproposal last June. Lawmakers have also hosted numerous hearings sobusinesses and experts could express their views.
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