Overtime Pay Rule Undergoing Final Review

A proposal to extend overtime pay to millions more Americans took a step forward this week.

The Labor Department has submitted its overtime rule to the White House’s Office of Management and Budget for a final review. Details of the final rule won’t be made public until it is published by the Labor Department, which has it on its July agenda. But that date could be moved up to ensure the rule isn’t blocked by a possible Republican president.

The proposed rule, announced last summer before undergoing a public comment period, drew heated opposition from business interest groups and many Republicans. It proposed raising to $970 a week, or $50,440 a year, the minimum salary that employees must make before they can be labeled exempt from overtime, up from the current threshold of $23,660 a year.

Federal labor law requires employers to pay workers time-and-a-half for time worked beyond 40 hours a week, but “white collar” employees can be exempt if their job duties are deemed managerial, administrative or professional.

The Labor Department said the change could affect 4.7 million people, including 200,000 in Illinois. Critics of the proposal warned employers might cut hours, base pay or responsibilities to counteract the added costs.

The regulation does not require congressional approval. But Congress can challenge the rule under the Congressional Review Act within 60 legislative days of it being finalized by the Labor Department. If a joint resolution of disapproval is passed by both the House and Senate and signed by the president, the rule is invalidated — which is why some are watching the clock.

If the 60-day period spills into 2017, it would be up to the newly inaugurated president to decide whether to sign the disapproval resolution. A Democratic officeholder is unlikely to do so, but it’s a riskier bet in the hands of a Republican president.