The U.S. Department of Labor proposed a new overtime pay regulation that will redefine large swaths of supervisory and administrative personnel as non-exempt employees, and which immediately drew broad-based opposition from employers who say it will raise their costs and eliminate jobs.
As proposed, the new rule would raise the minimum annual salary for an employee to qualify for overtime pay from the current $23,660 ($445 a week) threshold for management employees to $50,440 ($970 a week) under the Fair Labor Standards Act. These numbers would be raised each year based on the 40th percentile of weekly earnings for full-time salaried workers nationwide.
“Right now, too many Americans are working long days for less pay than they deserve,” President Obama said. “That’s partly because we’ve failed to update overtime regulations for years.”
DOL estimates that the new rule will raise wages for up to five million workers. The President said the change will strengthen the middle class because many low-paid supervisors have been exploited under the current limit.
Employer groups don’t buy that argument. Randy Johnson, the U.S. Chamber of Commerce Senior Vice President of Labor, Immigration and Employee Benefits, said it is “another example of the administration being completely divorced from reality and adding more burdens onto employers and expecting them to just absorb the impact.”
New Legislation Would Address Freight Issues
Although Congress has made little progress on a new infrastructure funding program, recently- introduced bills specifically target freight needs.
On June 23 leaders of the Senate Environment and Public Works Committee unveiled a six-year surface transportation reauthorization proposal called the Developing a Reliable and Innovative Vision for the Economy Act, or DRIVE Act
Authored by committee chairman Sen. James Inhofe (R-OK) and ranking minority member Sen. Barbara Boxer (D-CA), the $275 billion plan drew both praise and criticsm.
Although the bill contains provisions sought by freight representatives, it fails to address the biggest stumbling block to a new program: where to find funding. The bill leaves it up to the Senate Finance Committee to find the necessary funding sources.
Congress faces a July 31 deadline for expiration of the current temporary program extension and can’t agree on how to pay for a further extension.