Many workers will have to be a more frugal than expected during this year’s holidays; a nationwide increase in overtime pay, codified by the federal government back in May, is being delayed.
The law, which would have extended overtime benefits to roughly four million more workers, were set to take effect on December 1st. Late last month, however, the House passed a bill delaying the law’s implementation until 1 June 2017. It’s unlikely that the Senate, which is on recess until after Election Day, will have the time or the political capital to overturn the stay.
Republicans unanimously voted for the bill, called The Overtime Review and Reform Act. (Five democrats voted for it as well.) They claimed the new statute would create a crushing financial burden for small businesses, and insisted on the need for a longer implementation period. In addition, the conservatives argue that the overtime rule paints with too wide of a brush, and will adversely affect nonprofit organizations, colleges, and universities.
What the Department of Labor Proposed
The new rule effectively doubles the threshold for overtime exemption, from an annual salary of $23,660 to $47,476. (That is, if you make less than $47,476, you should receive overtime pay.) Moreover, this threshold would automatically be updated every three years to reflect cost-of-living increases.
To comply with the new law, whenever it finally takes effect, employers can pay time-and-a-half for overtime, raise salaries above the new threshold, or limit workers to 40 hours per week. Many employers will, no doubt, make changes so as to pay as little as possible.
Who the Victims Are
The victims of this new (prohibitive) bill are, of course, average employees who regularly work more than 40 hours per week. Representative Mark Takano (D-Calif) said that the bill “takes money out of the pockets of middle class Americans right before the holiday season.” He added, “In reality, this bill should be called ‘The Grinch Act.'”
And he’s right. Would that the grinching doesn’t act much longer.