Bill to delay final OT rule for 6 months clears House

With a 246-177 vote on September 28, the House passed a measure that would delay for six months the implementation of the Department of Labor’s (DOL) final overtime rule. Five Democratic lawmakers voted in favor of Regulatory Relief for Small Businesses, Schools, and Nonprofits Act (H.R. 6094). The measure was introduced the day after a group of 21 states and a business coalition filed separate lawsuits in federal court in Texas to enjoin implementation of the controversial rule.

Opponents of the new overtime rule point to the fact that it would double the salary threshold for overtime eligibility to $47,476 per year and requires automatic adjustments every three years. Moreover, the DOL will implement the rule on December 1, 2016, giving workplaces, schools, and organizations across the country just six months to make significant changes required by the rule.

Concerns have also been expressed that the final rule will stifle workplace flexibility and opportunity, impose significant burdens on small businesses, jeopardize crucial nonprofit services, and increase the cost of higher education. The Regulatory Relief for Small Businesses, Schools, and Nonprofits Act, by delaying implementation of the final overtime rule for six months, would give workers, small businesses, nonprofits, and colleges and universities more time to prepare for what the bill’s sponsors called “dramatic changes” resulting from the rule.

Representative Tim Walberg (R-MI), chairman of the Subcommittee on Workforce Protections, who introduced the Regulatory Relief for Small Businesses, Schools, and Nonprofits Act, said in a statement: “We all agree we need to modernize our nation’s overtime rules, but small businesses, nonprofits, and colleges and universities should not be hurt in the process. The Department needs to abandon this flawed rule and pursue the balanced approach we’ve been fighting for from the start. Instead, they are forcing those who have to deal with the real-world consequences to make significant changes before an arbitrary December deadline. While the Department continues to ignore widespread concerns, the House has taken an important bipartisan step to provide hardworking Americans more time to implement this expansive rule. The administration should do the right thing and approve this much-needed delay.”

Separate bill on OT rule also introduced

Republican lawmakers on September 29 introduced a bill that would change the timeline for implementation of the DOL’s final overtime rule—stretching across five years the increase in the salary floor for overtime pay. Although the press release announcing the Overtime Review and Reform Act, introduced by Senators Lamar Alexander (R-Tenn.), Susan Collins (R-Maine), James Lankford (R-Okla.), Tim Scott (R-S.C.), and Jeff Flake (R-Ariz.), said that it was similar to legislation introduced by Democratic Rep. Kurt Schrader of Oregon, that earlier measure, the Overtime Reform and Enhancement Act (H.R. 5813), would phase in the salary floor increases across the next three years, according to its sponsors.

The Overtime Review and Reform Act, a copy of which has not yet been made available, would stretch out over five years the DOL’s increase in the salary threshold for overtime pay from $23,660 to $47,476, which is now set to more than double on December 1, according to its sponsors. The measure would also require an “independent government watchdog” study of the overtime rule after its first year of implementation. Should the overtime rule be found to “negatively impact American workers and our economy,” the proposed legislation would exempt from further increases under the rule non-profits—including colleges and universities—as well as state and local governments, and many Medicaid- and Medicare-eligible facilities, such as nursing homes or facilities serving individuals with disabilities.

According to sponsors, the Overtime Reform and Review Act:

• Changes the implementation timeline for the overtime rule by directing the Obama Administration to make increases in four stages over a five-year period, instead of increasing the salary threshold under which employees qualify for overtime pay from $23,660 to $47,476 on December 1, 2016, to give American workplaces time to adjust to the rule;

• Prohibits an increase to the overtime pay threshold in 2017, giving employers and employees an opportunity to adjust to the new level while the Government Accountability Office (GAO) studies the impact of the rule on American workers after the first year of implementation, 2016;

• Prevents the administration’s automatic increases to the overtime threshold, similar to the legislation offered by House Democrats; currently, increases are set to occur automatically every three years starting in 2020, which the Overtime Reform and Review Act’s sponsor say exceeds the authority of the FLSA;

• Requires the Labor Department and the independent Small Business Administration Office of Advocacy to work together, using the GAO’s independent report, to certify that the 2016 increase under the rule “did not increase part-time work, or negatively impact workplace flexibility, workplace benefits, career advancement opportunity, or job growth.” Unless these government agencies certify that none of these negative consequences occurred, non-profit organizations—including colleges and universities—as well as state and local governments, and workplaces that receive more than half of their revenue from Medicare or Medicaid payments (such as nursing homes or facilities serving individuals with disabilities) will automatically be exempt from the rule’s remaining increases.

“The Overtime Review and Reform Act makes urgently needed modifications to the administration’s rule, which will otherwise on December 1 force changes in overtime pay that are too high, too fast, and will result in employers, non-profits, colleges and others cutting workers’ hours, limiting their workplace benefits and flexibility, as well as costing students more in tuition,” said Senate labor committee Chairman Alexander. “This is a moderate, bipartisan approach that should be able to pass both Houses before December.”

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