House votes to delay Obama’s overtime rule

The House passed a GOP-backed bill Wednesday night to delay the Obama administration’s controversial overtime rule from taking effect Dec. 1.

The Regulatory Relief for Small Businesses, Schools and Nonprofits Act passed mostly along party lines by a vote of 246-177, delaying for six months the rule that makes 4.2 million Americans eligible for overtime pay.

Under the rule, anyone earning up to $47,476 a year, or roughly $913 a week, would be eligible for overtime pay. The salary cutoff for overtime pay now stands at $23,660 per year.

{mosads}President Obama has threatened to veto the bill. A Statement of Administration Policy said that while the legislation “seeks to delay implementation, the real goal is clear — delay and then deny overtime pay to workers.”

Democrats noted that relatively few people are eligible for overtime pay given that the salary threshold has only been updated once since the 1970s. Sixty-two percent of full-time workers qualified in 1975, compared to 7 percent now.

“This bill would unnecessarily delay fair pay to millions of workers,” said Rep. Bobby Scott (Va.), the top Democrat on the House Education and the Workforce Committee.

After the rule was introduced in May, Speaker Paul Ryan (R-Wis.) called it an “absolute disaster,” and in a blog post Wednesday, House Majority Leader Kevin McCarthy (R-Calif.) claimed the rule would force employers to cut employee hours, effectively reducing their pay.

McCarthy argued that the rule should be delayed to give employers and employees time to adjust, and the next president an opportunity to put an end to what he called “harmful regulations.”

“The American people need a raise, alright, but the President needs to get it out of his head that Washington can wave a wand, declare more people will get overtime or higher pay, and people will have more money in their pockets,” he said.

Business groups like the National Federation of Independent Business and the National Council of Chain Restaurants (NCCR) have attacked the administration for wanting to do too much too fast. 

“The Labor Department, by setting the new salary threshold at the 40th percentile of weekly earnings for full-time salaried workers, or $47,476 ($913/week), failed to take into account the cost of living differences in communities around the country,” Rob Green, the NCCR’s executive director, said in a letter to the House this week.  

“Such a radical change is creating extraordinary challenges for employers around the country, including chain restaurants.”