The Trump administration released the final version of its revamped overtime rule Tuesday extending time-and-a-half coverage to an additional 1.3 million workers. The increase was nevertheless lower than the increase the Obama administration sought two years ago, which would have extended coverage to an estimated 4 million workers.
“Today’s rule is the thoughtful product informed by public comment, listening sessions, and long-standing calculations,” said Cheryl Stanton, administrator of the Labor Department’s Wage and Hour Division. “The Wage and Hour Division now turns to help employers comply and ensure that workers will be receiving their overtime pay.”
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 and they reach a certain annual salary threshold. The Labor Department on Tuesday set the threshold at about $35,500 annually, up from the current level of $23,000. The new level will go into effect on Jan. 1. The administration also adjusted related salary thresholds that apply to narrower categories of workers, such as the film industry.
“The Labor Department’s overtime rule is great news for American workers and business owners,” said Rep. Virginia Foxx of North Carolina, the top Republican on the Education and Labor Committee. “The DOL rule is a responsible, reasonable, and workable solution that will update outdated salary levels and increase the number of workers eligible for overtime pay, while providing needed clarity to America’s job creators.”
The Obama administration attempted to set the threshold at $47,000 in 2014, but its rule change was struck down in federal court before it could go into effect. The matter was unresolved when the Trump administration took office and it opted to rewrite the overtime rule itself, announcing its version in March.
Democrats lamented that the Obama administration’s effort was scaled back. “The Department of Labor’s new overtime salary threshold is a step in the right direction, but it fails to cover millions of middle-class workers who would have been eligible to receive overtime pay under the Obama administration’s 2016 rule,” said Education and Labor Committee Chairman Bobby Scott, a Virginia Democrat.
The Trump administration argued Tuesday the $35,500 threshold set a reasonable middle ground. “Wages have gone up by roughly 50% since 2004, so it only makes sense that the overtime salary threshold should increase as well. Not only will this rule follow the law — it’s also good policy,” said acting Labor Secretary Patrick Pizzella in an op-ed for the Wall Street Journal.
