April 14, 2023
New Bills Would Increase Overtime Pay Rules and Requirements
Legislation was introduced in both the House and Senate that would instruct the Department of Labor (DOL) to increase the overtime threshold for so-called white-collar employees to $82,700, the 55th percentile of earnings for full-time salaried workers, by 2027. The legislation would also require annual automatic updates and make significant changes to the duties test, requiring workers to spend less than 20% of their time on non-managerial work to qualify for the overtime pay exemption.
The Restoring Overtime Pay Act of 2023 was introduced in the Senate by Sen. Sherrod Brown (D-OH), and the House companion legislation was introduced by Rep. Mark Takano (D-CA). Currently, the overtime threshold amount is set at $35,568 and was last adjusted by the Trump Administration. The Biden Administration is planning on issuing a proposed rule in May that would include an increase in the current threshold amount and could include additional changes to the current wage and hour rules. Among those being promoted by organized labor is the repeal of the teaching exemption.
In 2021, Sen. Brown, Rep. Takano and others sent a letter to then-DOL Secretary Marty Walsh asking the Department to increase the overtime pay threshold amount to $82,000. While this reflects the amount that organized labor groups are advocating for, many in the employer communities, particularly nonprofit and small business employers, are concerned about how such a significant increase might affect their ability to retain staff without layoffs or large-scale job reclassifications and the resulting morale issues. The NAICU membership has been fully engaged with DOL on overtime proposals since a major increase in the threshold was proposed during the Obama Administration.
With the establishment of the Fair Labor Standards Act in 1938, Congress delegated the authority to make changes to the overtime threshold to the Secretary of Labor. These bills would effectively remove that authority and dictate when and how salary adjustments should be made by DOL. It’s unclear whether the Biden administration would support these changes.
The Restoring Overtime Pay Act of 2023 was introduced in the Senate by Sen. Sherrod Brown (D-OH), and the House companion legislation was introduced by Rep. Mark Takano (D-CA). Currently, the overtime threshold amount is set at $35,568 and was last adjusted by the Trump Administration. The Biden Administration is planning on issuing a proposed rule in May that would include an increase in the current threshold amount and could include additional changes to the current wage and hour rules. Among those being promoted by organized labor is the repeal of the teaching exemption.
In 2021, Sen. Brown, Rep. Takano and others sent a letter to then-DOL Secretary Marty Walsh asking the Department to increase the overtime pay threshold amount to $82,000. While this reflects the amount that organized labor groups are advocating for, many in the employer communities, particularly nonprofit and small business employers, are concerned about how such a significant increase might affect their ability to retain staff without layoffs or large-scale job reclassifications and the resulting morale issues. The NAICU membership has been fully engaged with DOL on overtime proposals since a major increase in the threshold was proposed during the Obama Administration.
With the establishment of the Fair Labor Standards Act in 1938, Congress delegated the authority to make changes to the overtime threshold to the Secretary of Labor. These bills would effectively remove that authority and dictate when and how salary adjustments should be made by DOL. It’s unclear whether the Biden administration would support these changes.
For more information, please contact:
Karin Johns