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April 28 — The Labor Department's final overtime rule will not raise the salary threshold quite as high as initially proposed, a Democratic staffer confirmed to Bloomberg BNA April 28.
The source verified that the new threshold—below which workers are eligible for overtime pay—will be about $47,000 per year.
That figure would be slightly below the $50,440 threshold the DOL's Wage and Hour Division proposed in 2015 and twice the current level of $23,660.
Observers are predicting the controversial rule will clear the Office of Management and Budget and be released in a few weeks.
Ross Eisenbrey, vice president of the Economic Policy Institute, told Bloomberg BNA April 28 that placing the cap at $47,000 rather than $50,440 would mean “1 million fewer people helped, but it's still 12.5 million people who will get the benefit of the rule.” The EPI helped the DOL come up with an economic basis for the proposed threshold.
The news of the new threshold was first reported by Politico.
The OMB, as part of its final review of the overtime rule, has been meeting with advocates on both sides of the issue.
Organizations representing a wide range of employers—including fast food franchises, car rental services, nonprofits and higher education entities—have cautioned the administration about the compliance challenges.
Amid the flurry of lobbying activity in recent months, some of the rule's most vocal critics have agreed that raising the target above $23,660 would be appropriate. They've asked for a compromise, including a lower threshold and a longer phase-in period.
An employer coalition that lobbies against the rule said the reduction to $47,000 doesn't go far enough. “This is still a 99 percent increase,” Lisa Horn, a spokeswoman for the Partnership to Protect Workplace Opportunity, said in a statement provided to Bloomberg BNA. “A token reduction will not alleviate the harm this rule will do to nonprofits, colleges, and small businesses and their employees.”
Republicans on the House Small Business Committee also weighed in by asking the OMB April 28 to return the regulation to the DOL.
For more information, see Compensation and Benefits Library’s Fair Labor Standards Act: General Principles chapter.
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