Perez ‘Confident’ Overtime Rule to Come by Spring

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By Ben Penn

Dec. 17 — Labor Secretary Thomas Perez is “confident” the much anticipated final rule to expand overtime pay eligibility will be issued by spring 2016, which would be ahead of the date estimated in the Labor Department's latest regulatory agenda, he told Bloomberg BNA in a Dec. 16 interview.

A spring release would appease worker advocacy organizations that support the controversial rule but are concerned publication in late 2016 would make the regulation more vulnerable to a Republican legislative challenge.

“We're working feverishly to carefully look through the comments,” Perez said. “I'm confident we'll get the final rule out by the spring of next year. It's very important; it's about middle-class security.”

In the latest regulatory agenda, released in November, the DOL's Wage and Hour Division estimated it would publish the final rule in July (33 HRR 1265, 11/30/15). The proposed rule issued last June (33 HRR 709, 7/6/15) would update the Fair Labor Standards Act by more than doubling the minimum annual salary for the overtime exemption to $50,440 from $23,660.

However, because of controversy about the proposed rule, it was considered a possibility that the final regulation could be delayed beyond July. Last month Solicitor of Labor M. Patricia Smith stated at an American Bar Association conference that the rule may not come out until “late 2016” (33 HRR 1227, 11/16/15). Smith also said the DOL is expecting that a lawsuit will be filed to challenge the final rule.

Timing Critical for CRA Challenge

In addition to a potential legal challenge by business groups under the Administrative Procedure Act, the regulation faces the prospect of a Republican-mounted Congressional Review Act challenge.

The CRA gives Congress the power to pass a joint resolution disapproving of a rule. If the Government Accountability Office determines that the overtime rule is a “major rule”—based on economic, competitive or other impacts—passage of the resolution by both chambers would automatically put the rule on hold for 60 days.

Rep. Tim Walberg (R-Mich.), chairman of the House Education and the Workforce Subcommittee on Workforce Protections, told Bloomberg BNA Dec. 9 that a CRA resolution of disapproval to block the rule “certainly … would be an ultimate outcome that we would want to use if we have to.” Depending on the timing, a potential Republican president in 2017 could withdraw the regulation.

Asked if the prospects of a CRA challenge play a role in his spring 2016 target date, Perez said, “Every rule I ever work on here is challenged or threatened to be challenged. If I were to let that worry me then I wouldn't get anything done.”

Both stakeholders who support the regulation and those who oppose it are keeping a close watch on the timing of the final rule, to determine whether it would be protected from a CRA challenge that could run into the next presidential administration.

“I'm glad to hear that Sec. Perez is focused on finishing the rule early,” Anna Chu, a vice president of policy and research at the think tank Center for American Progress, told Bloomberg BNA in a Dec. 17 e-mail. “It is critical that the rule be finalized before the end of the year.”

Exactly how soon it would need to be published to avoid CRA problems is unclear because days can be added or subtracted from the congressional calendar.

But an early spring release would mean “it should safely finish the CRA period while President Obama is still in office,” Judy Conti, federal advocacy coordinator at the National Employment Law Project, told Bloomberg BNA in a Dec. 9 e-mail.

To contact the reporter on this story: Ben Penn in Washington at bpenn@bna.com

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