The week before Labor Day may be a quiet one in Washington. But in the nation’s capital and across the country, legions of lawyers and lobbyists are scrambling to weigh in one of the most consequential regulations of Obama’s second term: An update to the Fair Labor Standards Act that would make 4.6 million more people eligible for overtime.
The comment period ends Friday on the rule, and the outcome could have more of a direct impact on Americans’ earnings as almost any federal law that’s passed since the Affordable Care Act. That’s no accident: As the Obama Administration has resorted to executive action as an end run around a gridlocked and hostile Congress, lobbyists have turned their attention to the more complex and obscure world of cabinet agencies, because rule-making and regulation is where today’s policy-making wars are fought.
Of course, it’s a different kind of warfare. Unlike the legislative process, where lobbying and dealmaking are more accepted, rulemaking is supposed to rest on an agency’s discretion, guided by technical analyses of economic impacts. Nevertheless, they’re still subject to outside influence — and on the most important rules, interested parties on all sides try their darndest to have an impact.
At the same time, Internet-based transparency measures have made it ever-easier for the general population to pick over proposals and tell regulators what they think. As a result, what used to be relatively insular, back-room affairs have become pitched public battles, generating mountains of input. In a few cases, at least.
“There have always been a small subset of rules that capture a lot of attention,” says Cary Coglianese, director of the Penn Program on Regulation at the University of Pennsylvania. “The big difference today is that instead of getting a few thousand comments, they can generate a few hundred thousand.”
Take the new overtime rule. Both businesses and worker advocates have been mobilizing since March 2014, when President Obama directed the Labor Department to revisit the regulations. The Bush administration’s 2004 update drew 75,028 comments over a 90-day window, which was a lot for the time. With the comment period closing on Friday, the change this time has drawn 154,712 comments, during just a 60-day window.
While a far greater response than your run-of-the-mill rule generates, that’s peanuts compared to this year’s blockbusters: The Federal Communications Commission’s net neutrality rule garnered 3.7 million comments, and the Environmental Protection Agency’s clean power plants rule drew 4.3 million.
The greater participation doesn’t necessarily manifest only because these rules have potentially such far-reaching consequences. Rather, it’s because coordinated campaigns on both sides have focused and channeled activists’ attention.
The overtime rule fight began years ago, as soon as the financial crisis settled down, when activists started asking the Obama administration to raise the salary threshold below which even white-collar managers are entitled to make time-and-a-half pay when they work more than 40 hours a week. With few upwards adjustments for decades, the regulation has come to cover only 8 percent of the salaried workforce, and employers can ask white collar workers who make more than $23,660 per year to put in long hours without extra pay.
“There is a large core group that has been working on this for years,” says Judy Conti, federal advocacy coordinator at the National Employment Law Project. “It might sound like a wonky D.C. issue, but this is something that’s going to restore peoples’ lives, make sure to put more money in peoples’ pockets.”
The group first started by laying a foundation of economic analysis to support the idea of raising the overtime salary threshold. They started with a built-in advantage: The chief economist at the Department of Labor came from the main think tank that has been leading that research, the Economic Policy Institute, and others in high positions also have backgrounds in worker advocacy.
Nevertheless, outside pressure became necessary towards the end of last year, as the process of developing the rule dragged on, and advocates worried it wouldn't end up as strong as they wanted.
“We heard that they were coming in with a threshold that was much lower,” says Ross Eisenbrey, a vice president at EPI who has played a key role in the overtime push. “And when we raised a ruckus, they rethought it, and came in with a higher number and had to redo their economic analysis.”
Meanwhile, EPI and the Center for American Progress were bringing in reinforcements from across the progressive spectrum, including women’s groups, civil rights organizations and unions. As soon as the rule was proposed in early July, they launched a dedicated Website, FixOvertime.org, through which people could file comments with the Department of Labor directly.
It worked. Groups sent it out on their e-mail lists, creating massive volume: Social Security Works contributed 15,000 supportive comments, the American Federation of State County and Municipal Employees generated 24,000, and Credo Action — a wireless phone company with a liberal bent — sent a whopping 50,000.
This isn’t an election, however; comment volume alone doesn’t determine the outcome. Agencies only have to show that they responded to substantive arguments. "In terms of the content of the information, there isn’t a lot of new information that these mass mailings are generating,” Coglianese says. “There’s no regulator that’s tallying that up and saying 85 percent favor this and 15 percent don’t.”
But even if they’re not contributing new information, CAP’s Anna Chu says the comments help give people in the administration the confidence to stand firm. “Once the proposal’s out there, one of the things is to make sure that it doesn’t get watered down,” says Chu. “It’s not final yet. And we want to make sure we keep it where it is.”
Because of the delay in getting the rule into proposal form, advocates have an additional sense of urgency to get it done. Congress has a certain amount of time to override the rule through the Congressional Review Act, and if Obama isn’t around to veto it, the whole thing could be invalidated. If that happens, the department would be barred from attempting to regulate in that area again — like was at the outset of the Bush administration in the 2000s, when Republicans rolled back a rule aimed at curbing repetitive motion stress that Bill Clinton’s Labor Department had finalized.
"If President Trump or Walker were presented with a resolution of disapproval, they would sign it,” Eisenbrey says. “And if they did, it would have really devastating consequences.”
Even with a friendly administration, progressives know they have to defend new rules because businesses and Republicans are trying hard to shoot them down.
They have a few heavy hitters in their corner. In the overtime case, all four Wage and Hour Administrators who served in George W. Bush’s Department of Labor are now working for employer-side law firms, helping major employers to head off a drastic change to a rule they helped update or administer just eleven years ago. They argue the Obama overhaul is coming too soon.
“It’s a little bit unseemly,” says one of the Bush veterans, Paul DeCamp, who is writing official comments on behalf of organizations he declines to name, as well as for his own firm, Jackson Lewis. “When the department is seen as acting based on politics, the courts are showing less and less deference to what the department thinks.”
Then there’s Littler Mendelson’s Tammy McCutchen heading up the Chamber of Commerce’s effort, and Seyfarth Shaw’s Alex Passantino serving as general counsel for the Partnership to Protect Workplace Opportunity, a purpose-built coalition of trade associations representing everyone from auto dealers to travel agents. The only Bush-era Wage and Hour Administrator not actively advocating is Al Robinson, who has been fielding questions about the rule from Ogletree Deakins.
The campaign followed a now-familiar playbook. Initially, employer coalitions worked with Republican legislators to hold congressional hearings and send letters expressing opposition to the administration’s proposal. Although Congress has no formal role in the process, agencies have to pay attention, because lawmakers do have several points of leverage: Angry legislators could bar funding for implementation of the new rule, or even change the agency’s statutory authority.
When the overtime rule came out, it appeared that business input may have worked: The department proposed no change to the “duties test,” which governs what tasks might exempt a worker from overtime. Employers had emphasized that changing that part of the Bush-era standard would be confusing and lead to more litigation. Still opponents were not satisfied, saying a move to essentially double the level above which white-collar workers would be exempt from overtime — from $23,660 per year to $50,440 — suggests their concerns were not taken seriously enough.
"I just believe they were primarily ignored, and there’s an agenda, and the agenda is clear, and it’s not favorable to business,” says Bill Thorne, senior vice president for communications and public affairs at the National Retail Federation, which has put perhaps the most energy of anyone into the overtime fight.
After the rule dropped, the NRF brought 200 business owners to Capitol Hill to tell legislators how it would impact them, and put out studies illustrating the cost to employers and negative effects on employees. The federation spent more money lobbying in the second quarter of 2015 than it has since records start appearing in 2000 — although it’s not broken out by issue or by agency, the overtime campaign likely took up a large chunk of the total.
Meanwhile, both sides have tried to claim the allegiance of the non-profit sector, which is torn between a belief that the rule might help low-income people and the recognition that complying with it could strain their own budgets. Accordingly, many nonprofits have avoided allying themselves with either side.
“We can’t do politics. We can’t be dragged into it,” says David Thompson, vice president of public policy for the National Council of Nonprofits. “The business community would love for us to be a shield. The labor community would love for us to be a champion.”
When all the comments are filed and grievances aired, all that matters is the Labor Department’s convictions— weighed against the possibility that pursuing them might lead to outsized negative consequences down the road. So far, there isn’t a proposal to cut off funding for implementation of the rule or revoke any of the Department’s authority. But rules do end up getting snagged in court, as the Environmental Protection Agency’s landmark air quality rule did in June. Given any legal opening, just one key comment overlooked, the overtime rule could be challenged as well.
“It’s not over until it’s over, and these things have a way of dragging on,” says Thorne, of NRF.
Correction: An earlier version of this article said the Department of Labor proposed raising the salary threshold above which white collar managers are entitled to overtime pay; in fact the Department proposed raising the threshold below which managers must receive overtime. Also, President Obama originally asked the Department to revisit the rule in March 2014, not April.