WASHINGTON – Labour Secretary Tom Perez told Congress on Wednesday that his agency is still working on President Barack Obama’s directive a year ago that the department come up with new rules to make more workers eligible for overtime pay for working beyond their scheduled hours.
Perez said a few more months are needed. “We’re actually working overtime on this,” Perez told a House panel.
The new rule could result in larger paychecks for millions of workers.
Overtime and minimum wage rules are set by law in the Fair Labor Standards Act, which Congress originally passed in 1938. That law gives the administration some leeway to define the rules.
The law requires most workers to be paid overtime — 1.5 times their regular wages — if they work more than 40 hours per week. The law allows exemptions for executives, managers and professional workers and sets the salary threshold above which workers don’t have to get overtime pay. The law also gives employers leeway to define workers as supervisors, and thus ineligible for overtime, even if they spend much of their work day performing non-supervisory work.
New rules would likely establish a minimum amount of managerial duties that a worker would have to carry out to be exempt from overtime.
The rules are aimed at workers currently designated as supervisory employees but exempt from overtime because they get paid a salary of more than $455 a week, or $23,660 a year. Obama ordered the Labor Department to recommend regulations that would increase that salary threshold and change the definition of what constitutes a supervisor.
Perez did not elaborate on why the delay was necessary.
“We want to make sure that our proposal, which we expect to release in the coming months, is informed by as many stakeholder views as possible,” he told the House Education and Workforce Committee.
The salary limit separating those who get overtime and those who don’t was increased to $455 in 2004 during the Bush administration. At the time, it hadn’t been increased since the mid-1970s.
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