The Corner

Will Congress Exempt Itself from the Overtime Rule?

A destructive Department of Labor rule to expand overtime pay was finalized a few days ago. The rule will affect 4 million salaried workers making between $23,660 and $47,476 a year. The long-term negative consequences will include a likely reduction in base salary and reduced hours, while many of us will have to start punching a time clock. It didn’t matter that employers and economists sounded the alarm to try to stop the rule.

Now the question is what Congress do in response to such a controversial rule. If history is our guide, Congress may try to exempt itself from the punishing consequences of the rule, even though many members of Congress lobbied actively for the adoption and implementation of this overtime mandate.

A few weeks ago, I noted:

And guess who has a large workforce that would fall prey to these rules? Congress. The Congressional Accountability Act of 1995 requires that Congress comply with the overtime pay standards established under the Fair Labor Standards Act (Congressional Accountability Act, PL. No. 104-1, Sec. 203 citing to 29 U.S.C. 206 (a)(1) and (d), 207, 212(c)). Many who work for Congress—such as staff assistants, press assistants, and legislative aids—more often than not—work long hours and make less than $50,000 annually.

As Rep. Alcee Hasting (D-Fla.) a supporter of the rule, told Bloomberg recently, “We don’t have a set-hour kind of situation here; some kids work 12, 14, 16 hours a day, weekends.” But he adds, “I don’t see how we could pay overtime” for the “17 or 18 people that each of us is allowed to have—that’s problematic for me.”

Irony of all ironies, the feeling is shared by many Democrats who overwhelmingly support the proposed expansion of overtime pay—at least, perhaps, until they realize they may also have to live by it. As the Bloomberg Daily Labor Report notes, it leaves these vocal supporters of the rule in an awkward position of having to acknowledge that “I can’t afford to give raises to the kids” or that “it’s impractical to be paying overtime.”

The newspaper reports that “‘Democratic chiefs of staff are freaking out’ about finding room in their budget for overtime wages” and fear that an overtime mandate will result in having to send staffers home at 5 p.m.

Please take a second to notice the double standard: When employers say that they would love to pay their employees more but they just can’t afford it, some members of Congress dismiss their comments and call for government rules to correct these employers’ greediness. But when lawmakers acknowledge budget (provided for by taxpayers’ money) constraints, that’s legitimate, loving even.

In theory, Congress should adopt the overtime rule. As I mention above, the Congressional Accountability Act of 1995 requires that Congress comply with the overtime-pay standards established under the Fair Labor Standards Act. But the process to attaining compliance has some twists and turns. The Board of Directors for the Office of Compliance must conduct a rulemaking process, and the final rules proposed by the board, as applied to all congressional employees, must be adopted by both the House and the Senate via a resolution. In 1996, all those procedural boxes were checked. But since 2004, Congress has left the “adopt” box unchecked.

In August 2004, the Department of Labor issued new overtime-pay regulations that change the standard compensation levels and overtime exemptions from weekly salary level of $155 for executive, $155 for administrative, and $170 for professional to a new standard of a weekly salary level of $455 ($23,660 annually). In other words, as before employers were exempted from paying overtime for their employees making more than $155 a week, the rule changed to only exempt salaries above $455 a week.

Following the CAA procedures, the Board of the Office of Compliance conducted a rulemaking process and submitted new rules to the House and Senate that would replace the overtime-pay standards applicable to offices and employees in each chamber. Regardless of which party is in the majority, Congress has not yet adopted the regulations proposed by the Board of Directors for the Office of Compliance to replace the 1996 overtime-pay standards with the proposed 2005 update. Imagine if private businesses didn’t follow the law or the regulations imposed on them by our giant regulatory bureaucracy. Effectively, the standards that Congress adopted in 1996 act as a “floor.” Individual congressional offices have the ability to comply with DOL’s higher overtime-pay standards on their own.

This history indicates that Congress has already made an exception for itself by not adopting the 2004 overtime-pay rule update. That inaction raises the question of what Congress will do if the board recommends that both chambers adopt rules conforming to the DOL’s recent overtime-pay rule. Will Congress ignore it as it did with the 2004 update? Or will it adopt an equivalent 2015 standard while expanding its taxpayer supported budget? Neither of these options are available to the private-sector employers directly subject to the DOL overtime-pay rule. Also, neither of these options are good or fair for the American people. In the first case, we have to live by a costly rule while Congress — yet again — exempts itself from its burden. In the second case, taxpayers have to foot the bill of the expanded budget. Awful either way.

Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University.

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