Labor Secretary Tom Perez told a House panel Wednesday that the White House’s proposed new overtime rule would be released sometime in the next few months.
The announcement reflects a delay from the administration’s earlier plans for the rule, which was originally scheduled to be released last month.
Perez gave no specific explanation for the delay, but indicated that it was because the administration was doing extensive outreach with groups that will be affected by the rule.
“We want to make sure that our proposal, which we expect to release in the coming months, is informed by as many stakeholder views as possible,” he told the House Education and Workforce Committee, adding later, “We are working overtime on this.”
President Obama signed an executive order last year calling for an updated interpretation of the Fair Labor Standards Act’s overtime rule. The proposed new rules are intended to force businesses to pay more employees more overtime by limiting an exemption in the current law.
Under the Fair Labor Standards Act, employers must pay overtime to workers who do more than 40 hours a week. But workers can be exempted from that requirement if their responsibilities are deemed “managerial,” also known as the “white-collar” exemption. One of the main requirements for the exemption is the workers must earn more than $23,000 annually.
The act allows the Labor Department to set the definition of an exempt employee, so the administration can change the exemption without involving Congress, but it requires a months-long bureaucratic process.
Liberal groups say that the existing $23,000 cut-off is far too low and allows managers to abuse the exemption. Perez said the administration agreed with that view.
“We have literally seen cases where the supervisor was making less than the people they supervise. That’s not fair,” he said.
Business groups argue that the current rules allow workers and managers to be flexible in their scheduling through benefits such as comp time. That flexibility likely would be prohibited under a rule change.
In January, the Huffington Post reported that the administration was considering raising the exemption to $42,000 annually. That would affect 2.6 million workers, or about 5 percent of all salaried workers, according to a November study by the American Action Forum, a right-of-center think tank founded by former Congressional Budget Office Director Douglas Holtz-Eakin.
The news disappointed liberal activists who had wanted the level raised to at least $51,000.
