Labor rule greatly increases number of workers eligible for overtime
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The U.S. Department of Labor’s new overtime rule, which updates the Fair Labor Standards Act and takes effect Dec. 1, extends the right to overtime pay to an estimated 4.2 million workers who are currently exempt.
It also strengthens existing overtime protections for an additional 5.7 million white-collar workers and 3.2 million salaried blue-collar workers whose entitlement to overtime will no longer rely on an application of the duties test.
The major change under the rule is that it increases the standard salary level for full-time salaried workers who are exempt from overtime to $913 per week, or $47,476 annually, up from $455 per week, or $23,660 annually.
The final rule also includes a mechanism to automatically update the standard salary level requirement every three years.
The law has generated significant opposition. Both the Washington-based U.S. Chamber of Commerce on behalf of more than 50 other groups, and Nevada Attorney General Adam Paul Laxalt on behalf of a coalition of 21 states, have filed litigation in U.S. District Court in Sherman, Texas, challenging the rule’s implementation.
Legislation has also been introduced in Congress to block its implementation. This includes H.R. 6094, introduced by Rep. Tim Walberg, R-Mich., which passed the house on Sept. 28. The bill would postpone the rule’s implementation until June 1, 2017.
Experts point out, however, that even if such legislation were to pass Congress, President Barack Obama has indicated he would veto it, and not enough votes are expected to overcome that veto.
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Employer response wary to new overtime rules
As anticipated, the Department of Labor has issued a new overtime rule that raises the salary threshold below which most white collar salaried workers are entitled overtime to: $913 per week, or $47,476 annually for a full-time worker, from $455 per week, or $23,660 annually.
