Labor Department Seeks to Make More Eligible for Overtime

The Labor Department can be proposing to expand overtime eligibility to include most salaried workers earning less than about $35,000 a year.

The completely new threshold could be substantially higher than the current level of about $23,700, yet could cover fewer workers than an Obama administration initiative which was thrown out by a federal judge.

Under the proposal announced Thursday, most workers earning less than the completely new threshold must receive time-along with-a-half pay when they work more than 40 hours a week.

The department anticipates which the rule will expand overtime eligibility by just over one million workers, assuming their employers don’t adjust their salaries or work schedules in response.

yet Tammy McCutchen, one of the architects of the Bush administration’s increase, said she was pleased which the department had set the threshold at about the 20th percentile of earnings for salaried workers inside South — in line with where she along with her colleagues had set the idea in 2004.

“I think which’s what they had to do in light of the Texas court decision,” said Ms. McCutchen, a lawyer at the management-side firm Littler Mendelson. “Anything higher could have been subject to challenge again.”

Many employers along with business groups argued which while the 2004 threshold was in need of an increase, the magnitude of the Obama change was unreasonable.

Some argued which the idea could significantly increase costs for employers, who could either have to pay out hundreds of millions more in overtime or raise workers’ salaries above the completely new threshold to avoid paying additional overtime. Many critics also said salaried workers could suffer a loss of status by having to account for their time the way hourly workers do.

The Obama administration argued which its proposal was modest by historical standards, noting which the idea could make fewer than 40 percent of salaried workers eligible for overtime pay based on their salaries, far less than the percentage who were eligible in 1975.

Even so, the idea estimated which more than four million workers could gain the right to overtime pay under its rule.

some other skeptics argued which the change could have little impact because employers could lower the base wage of people who work significant overtime hours, leaving their total pay, including wages along with overtime, roughly unchanged.

More liberal economists largely rejected This kind of analysis along with concluded which while base wages might fall somewhat, the increased overtime pay could more than offset the losses.

Employees who make more than the salary threshold are also eligible for overtime pay if they aren’t executives, administrators or professionals — which can be, workers who have significant decision-generating authority. yet the Obama administration believed which employers were routinely flouting This kind of so-called duties test by labeling rank-along with-file employees as managers, generating a high salary threshold more important.

The Trump administration’s original nominee for labor secretary, the fast-food executive Andrew F. Puzder, was openly hostile to the Obama overtime rule. yet after he withdrew his nomination under a personal controversy, his replacement, Alexander Acosta, struck more of a middle ground.

At his confirmation hearings in 2017, Mr. Acosta suggested which a reasonable salary threshold could be inside low $30,000s.

Last year, Mr. Acosta’s department held a series of public “listening sessions” to solicit input coming from employers, business groups along with worker advocates on where to set the threshold. Many inside business community echoed his $30,000-plus suggestion, while worker groups tended to favor the Obama threshold.

“At my confirmation hearings, I committed to an update of the 2004 overtime threshold, along with today’s proposal could bring common sense, consistency along with higher wages to working Americans,” Mr. Acosta said in a statement.

In addition to raising the salary threshold, the Obama administration’s approach also required which the idea rise automatically every three years to keep up with salary increases. The completely new proposal does not seek to raise the threshold automatically, yet suggests which the idea be updated through a completely new rule-generating process every four years.