Overtime Could Be in Jeopardy for 5 Million Workers

by | February 24, 2016 | Wage & Hour

Bureaucracy is boring. “Regulatory Plans,” “Notice and Comment,” “Final Rules”—the Administrative State tends to glaze eyes. But for a moment last July, the media set its gaze on bureaucracy. That’s because a bureaucratic agency, the Department of Labor, proposed a rule that could increase the wages of millions of workers.

Specifically, the DOL proposal makes approximately 5 million additional “white collar” workers eligible for overtime pay. Under existing rules, employers don’t have to pay overtime to many salaried, white collar workers who make more than $23,660 per year.  The DOL’s new proposal increases that “salary threshold” to about $50,440 per year, according to the Department’s projections. (More precisely, the DOL proposes to set the threshold at the “40th percentile of earnings for full-time salaried workers,” which it projects as $50,440 per year in 2016.)

That’s a big jump. To make this concrete, under the current rules, bosses are off the hook for overtime even if they pay poverty wages (literally, the federal poverty level for a family of 4 is $24,300). “If you work longer, you work harder, you should get paid for it,” explained President Obama, at a rally at the University of Wisconsin—La Crosse, a few days before the DOL’s rule came down. “[T]his is an issue of basic fairness.”

But fairness may be fading fast. A number of supporters of the proposed rule (including the AFL-CIO, National Council of La Raza, and the National Women’s Law Center) are concerned that the DOL will give Congress a chance to kill the measure.

Under a statute called the Congressional Review Act, the DOL must submit a rule report to Congress before the rule takes effect. If members of Congress wish to challenge the Rule, they will have sixty days to pass a resolution of disapproval. If that sixty-day period expires before the end of President Obama’s term, then the next president would decide whether or not to veto any resolution of disapproval. That could spell trouble for the new rule—and its estimated 5 million beneficiaries—depending on who moves into 1600 Pennsylvania Ave. in 2017.

For now, the rule’s supporters have to count on galvanizing DOL action. If they do, a boring bureaucracy may succeed in achieving an exciting change.