The White House detailed the final version of a rule Tuesday aimed at expanding overtime privileges to millions of more workers currently unqualified.
President Barack Obama has sought to change federal regulations so more workers can qualify for overtime. The Department of Labor (DOL) will officially release the final version of the rule Wednesday. Executive or manager positions currently cannot qualify for overtime if they have a salary of $23,660 annually. The new rule will raise the exemption threshold to $47,476 annually.
“Over the past 40 years, overtime protections eroded as a result of inflation and lobbyists’ efforts to weaken them,” the White House detailed in a statement provided to The Daily Caller News Foundation. “That’s why tomorrow, the Department of Labor is finalizing a rule to update overtime protections so they can help millions more Americans.”
The White House adds the updated rule will help restore overtime privileges which have dwindled over the decades. It notes the share of full-time salaried workers that qualifying for overtime has plummeted from 62 percent in 1975 to 7 percent today despite wage and job growth in recent years. The White House also released a video explaining the new rule.
“Additionally, this new level will be automatically updated every three years to ensure that workers continue to earn the pay they deserve,” the White House continued. “Increasing overtime protections is another step in the President’s effort to grow and strengthen the middle class by raising Americans’ wages. This extra income will not only mean a better life for American families.”
The Department of Labor (DOL) released a draft version of the rule in June, 2015, which was met with criticism from some lawmakers and business coalitions. The drafted version of the rule increased the exemption threshold to about $52,000 annually. The final version has a slightly less drastic increase and a longer phase in period for employers to comply.
Business groups speculating on the final rule May 15 noted an exemption threshold in the $47,000 to $48,000 range would still be damaging to employers. Business experts warn employers could be forced to reduce their salaried staff to overcome the added cost of labor. Those working in salaried position could be reclassified as hourly resulting in less flexibility and chances for advancement.
Republicans Sen. [crscore]Tim Scott[/crscore] and Rep. [crscore]Tim Walberg[/crscore] introduced legislation March 17 over concerns the rule change could hurt the very workers it’s meant to help. Their legislation would require the department to conduct a thorough economic analysis before releasing a final version of the rule. A coalition of conservative groups wrote a letter Tuesday in support of the opposition bill.
The Fair Labor Standards Act of 1938 is what establishes overtime protections among other rules like the minimum wage. The overtime exemption threshold has been increased on numerous occasions in the past to keep pace with inflation but never at such a drastic rate.
Republicans also issued a stern letter to federal labor officials Feb. 9 expressing their concerns. The letter was signed by 112 Republicans and two Democrats. The DOL provided businesses and lawmakers 60 days to comment when it first released the drafted proposal last June. Lawmakers have also hosted numerous hearings so businesses and experts could express their views.
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