Expanded overtime guarantees for millions

Cristiano Ronaldo

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Photo Credit: TheSmokingChair.com

President Barack Obama late in his second term oversaw a regulation that called for workers making up to $47,476 to be automatically entitled to time-and-a-half overtime pay. The move infuriated businesses and Republicans, who sought to block the rule in both Congress and the courts. Donald Trump’s election and a Texas judge’s ruling in 2016 led the Labor Department to revisit the matter and set a significantly lower threshold of $35,568.

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The move

Biden’s Department of Labor reopened the issue and proposed a rule at the end of August that would push up that cutoff by nearly $20,000 — to $55,000. The draft regulation, which still needs to be finalized, would also include a mechanism to automatically adjust that level every three years by yoking it to the 35th percentile of annual income.

The impact

The proposed rule would pave the way for roughly 3.6 million additional workers to be eligible for time-and-a-half overtime pay than were eligible under the 2019 policy, according to the Labor Department. It stands to be one of the most concrete policies to boost workers’ wages under Biden’s term, as other ambitious proposals like raising the minimum wage have been bottled up in Congress.

The upshot

The Biden administration is aiming to finalize the rule in April, but the agency will have to figure out a way to defend it against legal arguments similar to the ones that stymied the similar Obama rule. Additionally, any internal delays could expose the regulation to being later overturned by lawmakers using the Congressional Review Act, a tool that was successfully used in recent years to undo rules issued under both Obama and Trump.