OT pay rule for 4.2M still on ice

WASHINGTON — In May, Vice President Joe Biden swept into Columbus on Air Force Two, sampled some of Jeni’s Splendid Ice Creams and announced a rule change that would allow about 4.2 million more Americans to receive overtime pay.

Less than a year later, Biden is out of office, and that rule’s future is very much in doubt. A federal judge issued a temporary injunction in November blocking the rule just before it was to go into effect.

Then, President Donald Trump began his first day

in office with an order to federal agencies to freeze all pending regulations — a move that also seems to at least temporarily stop the rule. And the Republican-led Congress, too, has begun the year by rolling back regulations.

It’s an entirely different attitude than on that day in Columbus, when Biden announced the administration’s plan to require overtime pay for the majority of salaried workers who earn less than $47,476 a year, up from the previous cap of $23,660.

The rule had some exemptions — people with certain job responsibilities, such as executive or administrative duties, would not have qualified under the new threshold — but the Obama administration estimated that workers would receive more than $12 billion in additional pay over the next decade as a result.

Sen. Sherrod Brown, who joined Biden for the announcement, said that other than the birth of his five grandchildren, “this may be the single best day I’ve had in the United States Senate.”

Now, he is furious. “They are taking money away from workers making $30,000 and $40,000 a year,” the Ohio Democrat said. “If you’re working 50 or 60 hours, you ought to get paid time and a half.”

At the other end of the spectrum, Rep. Steve Chabot, R-Cincinnati, chairman of the House Small Business Committee, is optimistic that the overtime rule is dead. “I’m feeling a lot better about it now than I did during the last administration,” he said.

Chabot said the rule could ultimately drive some small businesses under as they struggle to afford overtime pay under the new setup.

“The vast majority of employers want to treat employees well,” Chabot said. “They don’t need the federal government telling them what they ought to pay people.”

Meanwhile, some companies have moved forward with the change despite the court order.

The supermarket chain Kroger had already told its workers about the rule when the injunction stopped it. The decision to go ahead and implement it cost $11 million and affected about 4,500 Kroger employees.

“We knew that moving forward with the plan was the right thing for us to do for our people,” said Keith Dailey, a Kroger spokesman. “We’ve moved forward, and we are comfortable with where we are.”

Catherine Ruckelshaus, general counsel and program director for the National Employment Law Project, said that overtime rules have been part of labor law since the 1930s. They were designed to protect workers from overwork, which could hurt their health and productivity. And, she said, they were also intended to give employers an incentive to “spread employment.”

“If you do have a job that requires 60 or 70 hours week, you can hire two workers to do that job and you’re spreading employment and not overworking one worker,” she said.

Amy Hanauer, the founding executive director of the left-leaning group Policy Matters Ohio, said the rule speaks to “the basic principle of how we establish a middle class in America.”

“By letting that erode, we really relegated a lot of people to poverty-wage jobs despite the fact that they’re working many, many, many hours,” she said. “I think they

restored a little bit of sanity, and it would be a big mistake to not have it go through.”

Critics of the rule say it would be a costly job killer. Amanda Wood, director of employment policy at the National Association of Manufacturers, said the rule created uncertainty for employers by linking automatic increases in thresholds to the consumer price index.

“I think that uncertainty worries our employers because they can’t plan if there’s a cloud of uncertainty on them,” she said.

“It’s also hard to create more jobs when you’re not sure what the next threshold would be in a year, two years, three years going forward.”

Even as those invested in the rule wait to see what the judge will say, they’re also watching the Trump administration, which has yet to weigh in on it.

Ruckelshaus said if the rule is held up in courts, “it won’t be that easy for the Trump administration to get rid of this, because if they want to completely withdraw the rule, it will have to be done via the notice-and-comment period, the way it was originally done.