NLBMDA Update: House Votes to Delay Overtime Rule
Last night, the House of Representatives passed 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 Department of Labor’s (DOL) Overtime Rule. In addition, identical legislation was introduced yesterday by Republican Senators Lamar Alexander (TN), Susan Collins (ME) and James Lankford (OK). The day before, the Obama Administration issued a Statement of Administration Policy threatening to veto the legislation.
NLBMDA thanks its members for continued outreach to congressional offices on the Overtime Rule. House approval of H.R. 6094 is a significant step in making needed reforms to the rule. NLBMDA staff has been working vigorously on behalf of its members and meeting with lawmakers regarding the Overtime Rule.
This spring before the rule was finalized, NLBMDA met with the White House’s Office of Management Budget (OMB) Office of Information of Regulatory Affairs (OIRA) stating its opposition to the rule. NLBMDA noted that the new rule-then a proposal-failed to consider regional differences for overtime pay, and that DOL’s analysis lacked proper attention to the impact on small business and was devoid of any empirical data linking earnings data to the realities of local economies, markets, and sectors. Previously, NLBMDA submitted written comments to DOL in September 2015 opposing the rule.
The House vote in favor of H.R. 6094 was 246 to 177. Five Democrats, Reps. Brad Ashford (NE), Henry Cuellar (TX), Dan Lipinski (IL), Collin Peterson (MN) and Kyrsten Sinema (AZ), joined Republicans in support of the bill delaying implementation of the Overtime Rule. Congressman Kurt Schrader (D-OR), a proponent of changes to the rule, voted against H.R. 6094.
In July, Rep. Schrader introduced 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. NLBMDA members have been extremely active contacting their lawmakers over the last two weeks requesting support for the Schrader-led bill.
The latest developments to address the Overtime Rule occur as Congress is set to leave Washington, D.C. to campaign, but will return after Election Day to finish up its business for the year.
Last week, 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 so drastically, and also 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.
Congress will have several weeks after Election Day to reform the Overtime Rule ahead of the implementation deadline. It is possible that a federal District Court could issue a temporary injunction delaying the rule while arguments are heard in the case. Despite the latest developments, at present, the Overtime Rule changes are still set to take effect in December.
If you have any questions please contact Ben Gann, NLBMDA’s Vice President of Legislative and Political Affairs, at [email protected]