The Office of Management and Budget (OMB), a White House review agency, has cleared the new overtime rule from the Department of Labor (DOL) that sets the salary threshold for avoiding overtime at $35,308 annually. The rule, which should be published soon, will make an estimated 1.1 million more workers eligible for overtime.
The rule is a far cry from the Obama-era version that set the threshold at $47,476 a year, a rule that was voided by the U.S. 5th Circuit Court of Appeals, arguably the most conservation review court in the country.
The means test to determine if a worker’s role excludes that person from overtime will remain unchanged, but attorneys general (AGs) from Blue (Democrat) States are poised to challenge the rule in court, just as Red State Republican AGs challenged the last one. They say the means test makes it too easy for a business to classify a worker as a manager and thus avoid paying overtime.
It remains to be seen how or if the hundreds of thousands of public comments submitted during the vetting process play out in the final rule. The majority of those comments were in favor of restoring the Obama threshold.
The rule, if not invalidated by a federal judge, would no doubt take effect in 2020.