And its going to be a very big deal. Politico reports this morning that an announcement may come within the week. This issue has been simmering for more than a year largely under the radar. But:
Congressional Republicans are gearing up for a major battle against raising the overtime threshold. The House Education and the Workforce subcommittee will devote much of a scheduled June 10 hearing on federal wage and hour standards to the overtime rule, even if it isn’t yet released. Sen. Lamar Alexander, chairman of the Senate Health, Education, Labor and Pensions committee, said the rule—sight unseen—“seems engineered to make it as unappealing as possible to be an employer creating jobs in this country.”
The trouble for them is Congress currently has no say in this matter.
So why is this a big deal? Under the Fair Labor Standards Act the Labor Department has the authority to set a salary threshold below which employees must be paid time and a half for more than 40 hours. That threshold right now is $23,660. It has only been changed once since 1975 and then only modestly.
If that number were raised to account for inflation since 1975, it would now be $52,000. How many people are out there working on salary for well more than 40 hours/wk earning between $23,660 and $52,000? A lot. One estimate says this would affect between 5 and ten million workers.
Imagine the consequences of this. Suddenly employers would either have to start paying overtime or hire additional employees to avoid it. This in turn will put more spending power in the hands of the kind of people who will immediately go out and spend it. It will function as a jolt of adrenaline to the economy.
It will also have potent political consequences. How many middle class white workers are out there who fall exactly in this range have historically voted Republican, usually on grounds having to do with social issues? Suddenly they will stand to get a pay increase, maybe a significant one, and they will see in graphic terms who it is that wants to block that. At the end of the day, voters will usually vote pocket book issues first unless they can be distracted by other things. This fight will have a way of focusing their attention.
A big fight in Congress over this issue will be good for Democrats. It will put the issue front and center for all to see. Republican Presidential candidates will be forced to take a position on the issue.
I have never understood why Democrats did not run harder on the issue of a minimum wage increase in 2014. Its a popular idea across the board even with Republicans. One of the more interesting election results in 2014 was the number of minimum wage ballot issues approved by voters even in conservative states. Arkansas, Nebrsaka. South Dakota. Alaska.
This is much the same. And Congress can't stop it though clearly they will complain loudly and maybe even try to change the law. Good luck overriding a veto on that.
Originally this was supposed to happen in February. Obviously it has not an my guess on the reason is that there has been much quiet opposition behind the scenes. Emphasis is on quiet because the opponents understand their position will not look good nor be popular.
Below are links to stories on this issue over the last year or so.
How Obama's Reforms To Overtime Law Will Change People's Lives (March 2014)
How Overtime Reform Will Grow the Economy from the Middle Out (August 2014
President Obama’s new overtime proposal could make a lot of people happier (Sept. 2014)
Obama Administration To Update Overtime Pay Law (January 2015)
Obama To Reveal Details Of Overtime Pay Reform: Americans Are Being ‘Cheated’ (VIDEO)
(March 2015)
Overtime Reform: What's Taking So Long? (March 2015)