Illinois Cherry Picks OT Rules Helping Low-Income Workers

April 9, 2004 ( - Illinois business leaders are up in arms over a new state law banning proposed U.S. Department of Labor (DoL) overtime rules except for those benefiting low-wage workers.

By Illinois lawmakers approving the federal override measure and by Governor Rod Blagojevich’s penning the bill into law, employers say they have thrown up another barrier to the state being able to attract new businesses and create jobs, the Chicago Tribune reported. Blagojevich signed the bill that had been approved overwhelmingly by legislators.

DOL submitted its proposed plan March 26 to the Office of Management and Budget (OMB) for review, which is standard procedure (See Final FLSA Regs Loom ). The OMB has up to 90 days to review the proposal, but it may or may not use the full three months.

Statewide, business leaders slammed lawmakers for banning the rules before the final version was released. They echoed sentiments that the law, like the minimum wage increase passed last year, makes the state seem unattractive to businesses.

“As we’re trying to attract companies to our state, having a different set of rules doesn’t make the playing field even,” Jerry Roper, president of the Chicagoland Chamber of Commerce, complained to the Tribune.

Others, like Rob Carr, vice president of government-member relations for the Illinois Retail Merchants Association, said the state law does not clarify the confusing, decades-old rules that have exposed employers to lawsuits. “We have companies that operate interstate. They like to see certainty nationwide. We continue to face uncertainty, which drove the changes at the federal level anyway,” Carr said.

The only portion of the federal proposal Illinois went for was one raising the minimum salary below which workers automatically qualify for overtime to $425 a week, or $22,100 a year, from the previous limit of $155 a week, or $8,060 a year. Otherwise, the law maintains the status quo on overtime eligibility in Illinois.

State Democrats hailed the law as a major victory for workers.”A lot of families rely on overtime pay just to make ends meet. This legislation is critical to the well-being of thousands of families across our state who are already struggling to get by,” said state Representative. Brandon Phelps, a Democrat.

But critics charge that the law is evidence of how Blagojevich is beholden to labor unions.

“The elements helpful to the employer community were left out of the state law,” said Jay Shattuck, executive director of the Employment Law Council for the Illinois Chamber of Commerce. “It sends another unfortunate signal to people in the business community looking to create jobs and retain jobs that Illinois isn’t very favorable about its business climate.”

Opponents of the updates to the white-collar overtime exemptions under the 1938 Fair Labor Standards Act say that 8 million or more workers would lose their overtime protection if the regulations were enacted, including military veterans, nurses, and retail and food service workers. But employers have complained for years that the Depression-era rules do not reflect the modern workplace and are hoping for clarity.