Contractors keeping a close eye on the fate of the Department of Labor’s overtime rule that would more than double the current overtime salary limit may assume that the rule is a goner in the current political climate. In fact organizations from the Society of Human Resource Management to American Society of Travel Agents have already declared the rule dead. However, it seems reports of the rule’s demise may be premature.
That’s because the rule has one very big ally in its corner: the AFL-CIO, the largest and most powerful federation of unions in the United States, which recently said it will sue the Trump administration if any attempts are made to water down the rule.
“The AFL-CIO and working people in unions remain committed to restoring overtime protections for working people and will fight any attempt to take away overtime protection or make it harder for working people to earn fair wages,” the organization says on its website.
More bluntly, the organization’s leader told Bloomberg it will sue if DOL tries to water down the rule. “Anything that dilutes it is bad,” AFL-CIO president Richard Trumka told Bloomberg.
In its current form, the Department of Labor’s overtime rule would double the current annual overtime salary limit of $23,660 to $47,476. Industry trade associations contend such a jump is bad for contractors because it would have significant ramifications for many employers. According to NAHB analysis, nearly 100,000 construction supervisors would be eligible for overtime under the new rules. NRCA said the rule would affect an estimated 4 million workers who will now receive overtime pay.
“…This blatant regulatory overreach will essentially hurt many of the workers the rule was meant to help,” NAHB Chairman Ed Brady said in statement. “Small business owners across the land, including the vast majority of home building firms, will be forced to scale back on pay and benefits, as well as cutting workers’ hours in order to avoid overtime requirements and remain in business.”
The new rule stipulated that employers needed to comply by Dec. 1, 2016. However, in a victory for foes of the rule, a federal judge in Texas granted a preliminary injunction to delay its implementation.
Republicans generally side with the judge and contractor associations on the overtime rule. Both groups support the GOP’s Overtime Reform and Enhancement Act. That bill would raise the overtime salary threshold to the Department of Labor’s $47,476 rate under the following timetable:
- Dec 1, 2016 -- $35,984
- Dec. 1, 2017 -- $39,814
- Dec. 1, 2018 -- $43,645
- Dec. 1, 2019 -- $47,476
Moreover, the legislation would eliminate a provision in the rule that requires automatic increases to the overtime salary threshold moving forward.
“The vast majority of home building firms are small businesses that employ fewer than 10 workers,” Brady said. “By gradually ramping up the overtime salary threshold, this legislation will ensure that the law remains relevant for today’s workforce. It also allows small businesses operating on tight budgets sufficient time to adjust.”
During his DOL secretary confirmation hearing, Trump DOL nominee Alexander Acosta, said it was unfortunate the threshold hadn’t been updated since 2004. However, Acosta also said doubling the amount would not only create “a stress on the system,” it might also overstep the DOL’s legal authority.
But even if Acosta and Republicans want to phase in the overtime increase, they could still face legal action from the AFL-CIO.