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September 29, 2016
House Approves 6-Month Delay of Overtime Rule

The U.S. House of Representatives passed a bill September 28 that would delay new Fair Labor Standards Act (FLSA) overtime regulations by 6 months; a similar bill was introduced in the Senate the same day. Experts, however, say employers shouldn’t expect a reprieve.

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overtimeThe U.S. Department of Labor’s (DOL) rule would drastically expand the number of workers eligible for overtime pay. Beginning December 1, employers must pay overtime to employees who learn less than $913 per week ($47,476 annually)—more than a 100% increase above the current threshold.

H.R. 6094, the Regulatory Relief for Small Businesses, Schools, and Nonprofits Act, passed the house 246-177. If enacted, it would push the rule’s effective date back to June 1, 2017.

A companion bill introduced yesterday in the Senate would do the same thing. Senator James Lankford (R-OK), the bill’s prime sponsor, said he ultimately would like to see the rule revised but in addressing the Senate September 29, said to lawmakers: “at a minimum, let’s delay it.”

Senator Lamar Alexander (R-TN) then introduced another bill that would allow a 50% increase of the salary threshold on December 1, according to the Committee on Health, Education, Labor, and Pensions. It also would allow the rest of the increase to be phased in during the next 5 years.

These efforts however, have a smaller chance of success than the lawsuits challenging the rule, says William E. Hammel, a partner in Constangy, Brooks, Smith & Prophete LLP’s Dallas office. (See States, Business Groups File Suits to Halt DOL Overtime Rule.) “They have a better chance of getting the court to issue an injunction and that’s an uphill battle in and of itself,” Hammel told HR.BLR.com®.

States and businesses have challenged DOL’s use of a salary threshold, but exemption has been tied to salary threshold for a long time, Hammel said. “The minimum salary threshold is a concept that’s pretty well established and I don’t think it’s going away.” If anything, the plaintiffs might find some success challenging the threshold’s automatic increase, he said previously, but that wouldn’t affect the provisions taking effect December 1.

The bills are facing several hurdles, including Congress’ schedule. Lawmakers are now adjourning until after the election; “they’re not going to be able to do it in time,” Hammel said. “And even if they did, it’s going to be vetoed,” he said, referring to a White House statement promising a veto on H.R. 6094.

So why are lawmakers pursuing these bills? They probably just want to be able to tell voters they stood up for small business, Hammel said.

This means that employers need to be ready for the rules. “Don’t delay,” Hammel said. “It’s not going to be stopped.”

“Make sure you’re doing what you need to do,” he said, adding that preparations may involve more than payroll and recordkeeping adjustments. “Make sure your managers are aware of this,” he said, and train them on timekeeping, leave, and paid time off (PTO) practices for their newly nonexempt employees. And this needs to happen soon, he said: “I would expect December 1 we’re going to have to be complying with this new rule.”

Kate TornoneKate McGovern Tornone is an editor at BLR. She has almost 10 years’ experience covering a variety of employment law topics and currently writes for HR.ComplianceExpert.com and HR.BLR.com. Before coming to BLR, she served as editor of Thompson Information Services’ ADA and FLSA publications, co-authored the Guide to the ADA Amendments Act, and published several special reports. She graduated from The Catholic University of America in Washington, D.C., with a B.A. in media studies.

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