House Republicans are indicating they will keep pushing against President Obama’s expansion of overtime rules, and the GOP’s control of both the White House and Congress next year means they stand a reasonable chance of rolling them back.
Republicans pointed to a report out Monday by the nonpartisan Congressional Budget Office as proof of the need for action. The report found that while the rule would boost worker earnings, in would lower family income overall due to higher consumer prices and other effects.
“This report confirms that the department’s extreme overtime rule is fundamentally flawed and will lead to harmful unintended consequences. It’s time to move forward on real solutions that will grow the economy and create greater opportunities for all Americans,” said a House Committee on Education and the Workforce spokesman who requested anonymity.
The House voted 246-177 last month to postpone the rule’s implementation by six months. All Republicans supported the effort and five Democrats also supported the bill, but the rollback got stuck in the Senate.
Federal law says employees must be paid time-and-a-half once they work more than 40 hours in a week. However, businesses may exempt workers from the requirement if their duties are “managerial” in nature. Currently, one of the requirements is that the worker must make at least $23,000 annually before he or she could be exempted. President Obama’s change raises the exemption to more than $47,000, which would greatly expand the number of people who qualify for overtime pay. The rule change was officially announced in May and is set to take effect on Dec. 1.
The CBO report found that canceling the Obama administration’s expansion of overtime rules would result in a net increase of $2.1 billion in real income for families in 2017.
“Real family income would fall for a small number of families because of the loss of overtime pay; rise for families with business income because of the increase in profits; and rise slightly for all families considered together because of the slight reduction in prices. Most of the increased income would accrue to families in the top fifth of the family income distribution, but average real income would increase for families in each [income group] in most years,” the report found.
In a statement late Monday, the Labor Department ignored the spillover effects cited by the department, focusing instead on the effects on earnings. “Today’s CBO report confirms what we already knew: The overtime rule restores the promise that a long day’s work should be rewarded with fair pay. It will result in higher earnings for middle income workers. At a time when income inequality is already of great concern, the report also concludes that reversing the rule would primarily benefit people with high incomes.”
