2016 Year in Review No. 3: Overtime pay expansion put on hold

WASHINGTON, D.C, MAY 18­—A new rule announced May 18 by the White House was designed to expand overtime pay to millions of workers, but late judicial moves put the rule on hold for 2016.

Under the new rule, those making a salary of less than $47,476, or $913 a week, would automatically qualify for overtime pay when they work more than 40 hours a week. The current threshold is a salary of $23,660, or $455 a week.

The initial announcement – set to affect an expected 4.2 million employees in its first year, and nearly 45,000 or 2 percent of Missouri’s workforce – sent employers into a tizzy about who was exempt and how to pay for it.

On one side were business advocacy groups, including the Springfield Area Chamber of Commerce and the National Federation of Independent Business, saying the government is out of touch with business realities and the new rule is bad for workers and companies. On the other, labor-centered organizations, such as the National Employment Law Project and the Economic Policy Institute, argued the rule benefits employees and strengthens the economy.

By September, 21 states and a coalition of over 50 business groups filed suit seeking to block the new rule. Missouri was not one of them. The groups claim the rule violates the U.S. Constitution and exceeds congressional authority.

Days before the rule was scheduled to kick in Dec. 1, U.S. District Judge Amos Mazzant in the Eastern District of Texas blocked the Obama administration’s overtime rule.

In the private sector, companies such as Phoenix Home Care Inc. brought its plans to a screeching halt, but in the nonprofit corner, Springfield Ballet Inc.’s directors already ironed out salary and workflow adjustments and they’re upholding those decisions.