House Passes Bill to Delay Overtime Rule; Senate Legislation Introduced

Prior to leaving to campaign for the November elections, the House of Representatives passed legislation that would delay by six months the effective date of the Department of Labor's (DOL) new Overtime Rule. The Regulatory Relief for Small Businesses, Schools and Nonprofits Act (H.R. 6094) provides a new effective date of June 1, 2017. The DOL’s new regulation doubles the exempt salary threshold for overtime from $23,660 to $47,476, and if the Senate doesn’t approve similar legislation upon returning in November, it will take effect on December 1, 2016. A companion bill (S. 3462) to the House legislation was introduced in the Senate by James Lankford (R-OK).

In addition, Chairman of the Health, Education, Labor, and Pensions (HELP) Committee, Sen. Lamar Alexander (R-TN), introduced the Overtime Reform and Review Act (S. 3464), which would phase-in the DOL’s new salary threshold in four stages over five years, starting with a salary threshold increase to approximately $36,000 on December 1, 2016, followed by a “pause year” in 2017 to allow employers to review and adjust for the consequences of the rule. Further increases to the salary level would occur annually thereafter, until reaching the final rule’s new threshold of $47,476 on December 1, 2020. The bill would also prohibit the rule’s automatic increases to the salary threshold, yet allow the DOL to propose changes to overtime regulations in the future through the customary notice and comment process. Lastly, S. 3464 specifies that increases after 2016 will not go into effect for nonprofits, colleges, or universities; Medicare and Medicaid dependent health care providers; and state and local governments unless the Administration can certify that the 2016 increase did not negatively impact these organizations.