Wrapping up his budget briefing, the Secretary of Housing and Urban Development noted that the Obama administration had only about 11 months left. “So we have to run and run and run,” he said.
Has the Labor Department gotten the message? It still hasn’t published a final rule updating federal overtime pay requirements. And it doesn’t have anything like 11 months to do so if it wants to ensure the rule gets changed.
Why the Rule Needs Updating
As you may recall, the Labor Department issued a proposed overtime rule in early July. It would replace the rule issued in 2004. That rule, among other things, set a new minimum salary for exemptions — a lower threshold, in real dollar terms, than when first updated 11 years before.
Anyone paid less than $455 per week — $23,660 a year — was entitled to one-and-a-half times that when s/he worked more than 40 hours in a workweek. Likewise anyone paid by the hour or in a job involving strictly “blue-collar” tasks.
Employers could take advantage of six diverse duties tests — some broadly defined — to classify white-collar workers earning more than the minimum as overtime-exempt.
They could, for example, classify assistant fast food restaurant managers as executives, though they spend most of their time taking orders, clearing off tables, etc. and have no authority to hire, fire or promote non-exempt crew members who do the same.
Those broad definitions reflect intensive lobbying by retail business interests and a very business-friendly Labor Secretary. They’ve not only enabled business owners to get free hours of low-skill work. For the same reason, they’ve reduced job opportunities for workers whose skills would match the tasks.
The squishy duties tests and the low salary minimum together have substantially undermined what the Fair Labor Standards Act intends — on the one hand, to “spread employment” and on the other, “to reduce overwork and its detrimental effects on the health and well-being of workers.”
Today, only about 8% of full-time salaried workers have protection from overwork. In 1995, when the threshold got its last major boost, 62% did.
What the Proposed Rule Would Do
The proposed rule wouldn’t change the duties tests, though the Labor Department invited comments on whether they were actually screening out workers who shouldn’t be overtime-exempt. It instead opted to just redraw the “bright line” for exemptions.
The rule would immediate raise the salary threshold to $50,440 a year, assuming that’s the 40th percentile of salaried workers’ earnings, as the Labor Department estimates.
The threshold would then automatically rise to keep pace with either the 40th percentile or consumer price inflation. The Department sought comments on which to choose.
One way or the other, the adjustments would prevent the erosion-by-neglect that’s denied so many workers the extra money or time for family, exercise, volunteering, etc. that entitling them to overtime pay would provide.
How many we don’t know. We do, however, know that some 5 million would immediately no longer have to work up to nearly two regular workdays for free, assuming employers comply with the rule.
Which means, among other things, that the Labor Department has the resources to enforce it. Funding for the division that enforces wages and hours rules is now at about the same level as in Fiscal Year 2012.
Why Time Is Short
The Labor Department has said it expects to publish a final overtime rule in July. Not such a long time after the end-date for comments, especially when it has nearly 300,000 to digest.
But the Department doesn’t always publish on schedule. In this case, it would best publish sooner because the longer it waits, the more it puts the final rule at risk. Here’s why.
An updated overtime rule would qualify as a “major rule,” according to a law passed back in 1996. That means Congress has 60 legislative days to review it — and can try to kill it by passing a resolution of disapproval.
Note that the clock runs only when Congress has scheduled days for members to do the business we thought we elected them for. Not many of those days left in this session, what with members given ample time for their first order of business, i.e., getting reelected, plus an enviable amount of paid time off for the holidays thereafter.
Unlike most bills, a resolution to disapprove requires only a majority to pass in the Senate — the same as what’s needed to pass any bill in the House. So Republicans could send a resolution to the President even if no Democrats voted for it.
The President would surely veto it, however, And Republicans don’t have the two-thirds super-majorities to override a veto.
All well enough and good if the final rule gets to Congress soon. If it doesn’t, then Republican leaders can delay the vote until the next Congress — and the next President — are in office. Who knows how this strange election season will end?
And who hasn’t noticed how Republican Senate leaders have already seized on the upcoming election to argue against the President’s calling for an up-or-down vote on a decision that will have wide-ranging effects, including on our nation’s workforce?
How to Counter Pressures for Delay
We didn’t need this new, unexpected clash to foresee a potential strategy aimed at blocking overtime rule reform. More than 100 members of Congress, virtually all Republicans, had already asked the Secretary of Labor to “reconsider moving forward with … [the] rule as drafted” — or one gathers, anything at all.
So a coalition of national worker and family advocacy organizations urges us to help create a sense of urgency in the Labor Department, through a brief note to the President. Seems like the best we can do right now to help over-worked, under-paid workers — and some without any or enough work too.