Overtime Rule Critics OK With Smaller Threshold Hike

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By Chris Opfer

April 25 — Some of the most vocal critics of the Labor Department's new overtime rule agree that more workers should be eligible for time-and-a-half pay, just not at the level proposed by the Obama administration.

Businesses, industry groups and Republican lawmakers told Bloomberg BNA the threshold earnings level under which workers are automatically entitled to overtime pay should be bumped up from the $23,660 mark currently in place.

They're not on board, however, with the DOL's proposal (RIN 1235-AA11) to more than double the threshold to $50,440 (125 DLR AA-1, 6/30/15).

“It doesn’t make any sense, what they’ve done,” Rep. John Kline (R-Minn.) told Bloomberg BNA April 21. “I wouldn’t have objected to some reasonable way of raising it.”

The DOL is preparing to publish a final version of the rule amid a flurry of lobbying activity.

Opponents have been pushing tweaks they say would soften the impact on employers, including a smaller threshold hike, phased-in implementation and the elimination of automatic eligibility level increases.

Opponents Eye New Threshold in ‘Low 30s.'

The National Association of Wholesalers, the Retail Industry Leaders Association and the College and University Professional Association for Human Resources are among the groups lobbying against the rule who say they would support a more moderate threshold increase.

Representatives for those groups, which are part of a larger coalition of business and organizations looking to stop the rule, said they don't necessarily have a specific number in mind.

“We fully support a change,” CUPA-HR President and CEO Andy Brantley told Bloomberg BNA April 21. “Movement to somewhere in the low 30s would be much more reasonable than the 113 percent increase that was part of the proposed regulation.”

When the DOL rolled out the proposal last June, supporters said it would help fight wage stagnation by making some 5 million additional workers eligible for overtime pay. The proposed rule has also been floated as a response to Congress's inability to raise the federal minimum wage and pass other legislation to bolster workers' paychecks.

The proposal would set the salary threshold at the 40th percentile of earnings for full-time salaried workers, as determined by the DOL's Bureau of Labor Statistics. Labor Secretary Thomas Perez said when the department issued the proposed version of the rule that it would also automatically increase the threshold annually to guard against “erosion.”

Kline, Rep. Tim Walberg (R-Mich.) and Sen. Tim Scott (R-S.C.), all of whom are sponsors of legislation (H.R. 4773, S. 2707) that would block the final rule from going into effect, have said they would be on board with some increase in the threshold level. Kline in particular has said that level should also account for regional cost-of-living differences.

“I'm not sure it should be one number for the entire country,” Kline said. “It seems to me that it should have some relationship to the community and local economy.”

To contact the reporter on this story: Chris Opfer in Washington at copfer@bna.com

To contact the editor responsible for this story: Susan J. McGolrick at smcgolrick@bna.com