WASHINGTON, D.C. - With the Department of Labor Overtime Rule scheduled to go in effect December 1, 2016, a new bill was recently introduced in Congress to slow down the ruling announced in May.
Four House Democrats - Reps. Kurt Schrader, Oregon; Jim Cooper, Tennessee; Henry Cuellar, Texas; and Collin Peterson, Minnesota - introduced The Overtime Reform and Enhancement Act, which gives small businesses, non profits and universities more time to comply with the final overtime rule.
According to the Wood Machinery Manufacturers of America, the new wage and hour rules are fraught with potentially unintended consequences for many of the workers it is meant to benefit.
“The current overtime threshold is horribly outdated and needs to be raised as both employees and employers navigate our changing economy. This bill will do exactly that without disrupting the way businesses operate and employees are paid,” said Congressman Schrader. “Since the DOL’s immediate phase-in date was announced, we’ve heard from business owners and their employees who are worried about implementing this increase overnight. Without sufficient time to plan for the increase, cuts and demotions will become inevitable, and workers will actually end up making less than they made before. It’s long past time we strengthen overtime pay protections for American workers in a meaningful and effective way.”
The legislation would set the initial overtime increase set for December 2016 to $35,984, and then follow a three-year annual phase in process to gradually meet the DOL’s new overtime salary threshold. The bill also eliminates the automatic three-year increase to the salary threshold established under the new rule, and it recognizes that future administrations can and should update the overtime rules, as they are required to under the Fair Labor Standards Act, but limits the ability of the DOL to update the rules on autopilot.
In May 2016, the Department of Labor announced its final overtime rule, which increases the salary threshold for overtime eligibility by 100% to $47,476.
The Wood Machinery Manufacturers of America (WMMA) had raised concerns about the final Overtime Rule suggesting that it could have unintended consequences for workers.
Other industry associations like National Association for the Self-Employed (NASE), applauded the new proposals saying that it will give all invested parties time to comply.
“Any new rule or regulation will impact a small business’ bottom-line and they should be given fair and adequate time to make the necessary arrangements to comply,” said Katie Vlietstra, Vice President for Government Relations and Public Affairs. “While the Obama Administration’s recently enacted overtime rule will have a significant impact on our nation’s small business community, from costs to labor management, this new measure will allow them a fair opportunity to make the requisite adjustments to comply with the new rule.”
The National Association of Home Builders (NAHB) also came out in support of The Overtime Reform and Enhancement Act. “The nation’s home builders applaud Rep. Schrader for sponsoring this important bill that represents a balanced approach to raise the overtime threshold for workers while minimizing the impact on small businesses,” said NAHB Chairman Ed Brady, a home builder and developer from Bloomington, Illinois.
Also on board is the National Newspaper Association (NNA), which said it supported the new legislation proposed by the four House Democrats to phase in the increase in the threshold salary requirements for overtime-exempt employees.
“NNA appreciates the work of these four congressmen, who appreciate the bind small businesses in their states were put in by the Labor Department rule," said NNA President Chip Hutcheson, publisher of The Times Leader in Princeton, Kentucky. "They understand that neither we nor the Labor Department have any idea where the money would come from to impose 100 percent increases on salary levels across an entire work force, particularly in small towns where costs of living are lower than in urban areas. This bill accomplishes much of what the government wanted to do without strangling the small businesses in the process.
U.S. Secretary of Labor Thomas E. Perez responded to the new bill saying, “Millions of workers have been waiting years for the overtime rules to catch up to reality and ensure that working people get the pay or time with their families that they deserve. This legislation would ask them to wait even longer. The President and I think that American workers have waited long enough for a fair day’s pay for a long day’s work. That’s our vision of an economy that works for everyone. By delaying implementation and removing the automatic updating of the salary threshold, the proposed legislation stands in stark contrast to that vision.”
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