The Labor Department is considering setting the cut-off point at which employers can legally exempt workers from overtime pay at $47,000 in annual income, about $3,000 lower than it had previously indicated.
That would represent a slight pullback for the administration regarding the upcoming rule change, which is opposed by business trade groups and Republican lawmakers.
The administration had previously announced that it intended to set the exemption at just over $50,000 in annual income, about double its current level. The announcement cheered labor organizations who had long urged that the rate be set significantly higher to prevent employers from limiting the amount of overtime that they must pay.
The change was reported by Politico, citing anonymous sources. A Labor Department spokesman could not be reached for comment.
Business groups said it would not amount to a significant change since either way the rate would raised substantially above its current level. “We’ve seen the reports but have no independent verification. Either way, this is not a substantive improvement and will still result in all the problems the Chamber has highlighted in the past,” said Chamber of Commerce spokeswoman Blair Holmes.
Employers are required under the Fair Labor Standards Act to pay hourly employees time and a half for any work done past 40 hours in a week. Employers can exempt workers if they are deemed managerial. Currently, one requirement for that exemption is that the worker must make at least $455 a week.
In June, the administration officially proposed that the rule be updated to increase that to $970 a week, a change that would require an estimated 5 million more workers be paid overtime. Now, officials are apparently considering putting the cut-off at about $900 a week instead. Some department economists have reportedly pushed all along for a more modest increase to protect the economy.
Labor groups have long said the exemption is widely abused by employers. Business groups have complained bitterly about the new rule, saying it raises the threshold too far, too fast.
