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September 21, 2016
Small Business Owners Ask DOL to Delay Overtime Rule

A group of small business owners has asked the U.S. Department of Labor (DOL) to delay the effective date of the new overtime regulations by 6 months.

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The regulations, which more than double the salary threshold for the Fair Labor Standards Act’s (FLSA) overtime exemptions to $913 per week, are set to take effect December 1.

In a letter sent September 13, the National Federation of Independent Business (NFIB) requested a June 1, 2017, effective date as a compromise. The organization was careful to note that the request should not be construed as acquiescence to the rule and that it would prefer a complete repeal.

Overtime regsAt the very least, however, small businesses should receive extra time to comply, it argued. “Large corporations with legal, financial, and personnel departments … may prove able to cope with the new Final Rule in a 25-week window of time,” said NFIB. “But the Department cannot reasonably expect America’s small businesses to match them.”

In a statement announcing the letter, the group’s president and CEO, Juanita Duggan, said the rule potentially affects 44% of small employers and many still don’t understand it. Many small businesses will have to reorganize their workforces and implement new systems for tracking hours, she said. “They can’t just flip a switch and be in compliance.”

NFIB also voiced its support for H.R. 5813, the Overtime Reform and Enhancement Act, which would phase in the new rule in four steps, reaching DOL’s $913 per week in 2019. It also would void the rule’s automatic updates and require that DOL put any increases through the formal rulemaking process. At press time, the bill had seven cosponsors. A similar measure, the Protective Workplace Advancement and Opportunity Act (H.R. 4773, S. 2707), has 105 cosponsors in the House and 45 in the Senate. That bill would void the rule entirely and delay any similar efforts for at least a year.

DOL, however, seems to be moving forward with implementation. “The final rule will become effective on December 1, 2016, giving employers more than six months to prepare,” DOL says in one of many online resources on the topic. And at the Society for Human Resource Management’s (SHRM) annual conference held earlier this year, David Weil, administrator of DOL’s Wage and Hour Division, assured attendees that the rules are here to stay.

Tammy McCutchen, a former WHD administrator, offered a similar prediction. President Obama likely would veto any bill that chipped away at the overtime rule, she said, adding that employers should expect DOL to begin enforcing the rule December 1.

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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