On Wednesday, September 28, 2016, the U.S. House of Representatives voted 246-177 to delay the implementation of the Department of Labor’s new rule which raises the salary level for exemption from overtime pay from an existing threshold of $455 per week to $913 per week. The new rule is currently scheduled to go into effect on December 1, 2016. Numerous business groups, including the U.S. Chamber of Commerce, have filed a lawsuit against the U.S. Department of Labor opposing the significant increase. In addition, a lawsuit challenging the new rule has been filed against the U.S. Department of Labor by twenty-one (21) states.
House Resolution 6094, introduced by Republican representative Tim Walberg, seeks to delay implementation of the U.S. Department of Labor’s Overtime Rule for an additional six (6) months. According to statements made by Walberg, he and others agree that the country’s overtime rules need to be updated. However, he believes that lawmakers need to provide more time for small business owners and others to implement the new rule, and has called the existing December 1, 2016, deadline unrealistic.
In response to the action by the House, the White House has issued a Statement of Administrative Policy strongly opposing HR 6094. In the SAP, the administration expressed its belief that overtime protections have eroded over the last several decades as a result of inflation and lobbyist efforts to weaken them. The administration believes that despite strong income growth in the last year, most American families “have been squeezed by stagnant earnings during this period, and the lack of overtime protections only has put them at a further disadvantage.” The Department of Labor’s new rule is expected to extend overtime protections to 4.2 million additional Americans who are not currently eligible for overtime under existing federal law. According to the administration, the new rule provided more than six (6) months for employers to prepare for implementation. President Obama has indicated that if he is presented with HR 6094, he will veto the bill.
In light of the fact that President Obama has already indicated that he will veto HR 6094, there is no question that employers need to be prepared for implementation of the U.S. Department of Labor’s new overtime rule before December 1, 2016.