NLBMDA Issues Update on Overtime Rule
The latest development in the Department of Labor’s (DOL) Overtime Rule occurred on September 20, when more than 50 business groups, including the U.S. Chamber of Commerce, National Retail Federation, and National Federation of Independent Business (NFIB), filed suit in federal court to block changes to the Department of Labor’s (DOL) Overtime Rule.
The coalition filed its case in United States District Court, Eastern District of Texas. A separate coalition of 21 states has also filed a lawsuit challenging the rule. The complaint filed by business groups can be found here.
Both lawsuits state DOL abused its authority by increasing the salary threshold drastically and failed to account for regional variations in the cost of living. The agency also violated federal law by indexing the salary threshold to the 40th percentile of income, with automatic increases every three years, the lawsuits claim.
On December 1, the rule increases the salary level under which full-time salaried “white collar” employees qualify for overtime pay from $455 per week ($23,660 annually) to $913 per week ($47,476 annually). It also automatically updates the threshold every three years without providing an opportunity for stakeholder comment.
NLBMDA would like to thank its members for contacting their lawmakers in support of the Overtime Reform and Enhancement Act (H.R. 5813), which would incrementally phase in the new threshold over a three-year period, beginning with a 52 percent increase this December, and more gradual increases in December 2017, 2018 and 2019. The legislation would also remove the automatic increase to the threshold. In meetings on Capitol Hill, congressional offices indicate that H.R. 5813 will be brought to the House Floor for a vote if there is a strong showing of support from both Republicans and Democrats.
In an acknowledgement that time is running short on a legislative solution, on September 21 Rep. Tim Walberg (R-MI) introduced the Regulatory Relief for Small Businesses, Schools, and Nonprofits Act (H.R. 6094), which would require a six-month delay in the effective date of the rule. In March, Rep. Walberg introduced a broader bill, the Protecting Workplace Advancement and Opportunity Act (H.R. 4773) to halt the rule and send it back to DOL for further analysis. H.R. 4773 has the support of nearly 200 House Republicans but no Democrats support it. Given the need for a compromise, Rep. Walberg has introduced a more modest measure hoping to garner the support of Democrats.
Dealers should note that they are still required to comply with the Overtime Rule. Although the lawsuits give the federal District Court an opportunity to issue an injunction halting the rule that is far from a certainty. NLBMDA agrees with the arguments made by business groups in federal court and continues to work on a legislative solution to the rule before it takes effect.
If you have any questions please contact Ben Gann, NLBMDA’s Vice President of Legislative and Political Affairs, at [email protected]