IE 11 is not supported. For an optimal experience visit our site on another browser.

Rule Expanding Overtime Pay Eligibility Won't Be Finalized This Year

It apparently is taking longer than expected for the U.S. Labor Department to finalize a rule making 5 million more workers eligible for overtime pay.
Image: A man works at a call center
A man works the phones at a call center in San Diego in October 2013.Sandy Huffaker / for NBC News, file

It apparently is taking longer than expected for the U.S. Department of Labor to finalize a proposed rule that would make about 5 million more American workers eligible for overtime pay, in part because the agency received a flood of 270,000 comments in response to a preliminary version.

Right now, the threshold for white-collar salaried workers to earn overtime is $23,660, meaning that workers who earn more than that amount -- below the poverty line for a family of four – can’t be paid at a higher rate if they work more than 40 hours a week or 8 hours in a day.

The proposed revision would raise that to $50,440 for 2016, with the expectation that it would be indexed and rise according to an inflation or wage-related metric in the future.

The agency is also considering changes to the types of work that are exempt.

The delay in implementing the rule was first reported Thursday by the Wall Street Journal. The newspaper quoted a participant at a panel discussion at an American Bar Association conference last week as saying Solicitor of Labor Patricia Smith had said it would not be finalized until late 2016. Employers had been expecting the rule to go into effect late this year or early next, the Journal said.

Labor Department spokesman Jason Surbey declined to comment on the timing of the rule or whether it had been delayed, saying only that “The administration’s intention is for the rule to be effective in 2016.”

Obama to Expand Overtime Pay to Nearly 5 Million Workers

But NBC News talked to another participant in the recent panel discussion who largely supported the Journal’s account.

“I would not anticipate these regulations in the first half of 2016 at a minimum,” said Daniel Schwartz, an employment lawyer and partner at Shipman & Goodwin.

“(Smith) had indicated sometime in 2016 and at one point in the discussion said it ‘may be late,’” he added.

The proposed rule received some 270,000 comments during the 60-day period after its publication in June. By comparison, the agency received 75,280 comments in response to its last proposed rule update in 2004.

“She indicated it was a lot of comments to go through and they were reading every one and that would take some time,” Schwartz said of Solicitor Smith’s comments at the conference. In his experience, he added, it’s not unusual for months to pass between a Department of Labor proposed rule and final rule publication.

“I came away with that conclusion that that was going to take a lot longer, but she didn’t indicate that specifically,” he said.

The Best Jobs for Work-Life Balance: Data Scientists, SEO Managers and More

Surbey, the Labor Department spokesman, declined to comment on whether or not the timeline to publish a final rule had been pushed back to handle the number of comments the agency received, saying only that “The department is reviewing all comments received during the public comment period.”

Ross Eisenbrey, vice president of the left-leaning Economic Policy Institute, expressed optimism that the agency could publish the final rule in the first half of next year.

“It could be effective within 30 days after that,” he said, although Schwartz said Smith told the panel audience at the conference that she thought the agency would give employers at least 60 days to comply.

Eisenbrey added that the stakes to finish the rule quickly are high. A delay could give lawmakers in opposition to the changes opportunity to derail implementation.

“If they keep it simple and all they do is raise the threshold and respond to issues about raising the threshold … I don’t believe it should take them any longer than April or May to do it,” he said.