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Congress considering bill to delay DOL’s exempt classification rule change

October 17, 2016

By Michael Burns, courtesy of SBAM Approved Partner ASE

Momentum is growing around obstructing the implementation of the US Department of Labor’s (DOL) change to the salary level test for exemption from Wage and Hour overtime and recordkeeping requirements. This rule is scheduled to go into effect December 1, 2016 and impact an estimated 4 million jobs that without correction could become non-exempt and overtime eligible.

In the September 27th issue of EPTW, we wrote about a legal challenge by twenty-one states and a coalition of business groups initiating a lawsuit to enjoin implementation of the rules. On September 28th the House of Representatives passed a bill that would delay implementation of the Rule for six months. The vote was 246-177.  

Legislators expressed concern that the new salary level threshold of $47,476 is too high and more importantly the automatic adjustment to the salary level every three years was an overreach by an agency trying to create law without proper authorization. In addition, this bill is riding on the belief that it imposes too much burden on small businesses, non-profits and schools that must make expensive changes to their budget’s direct personnel costs. 

Tim Walberg, who is a GOP Congressman from Michigan and Chairman of the Subcommittee on Workforce protections that introduced the Regulatory Relief for Small Business, Schools and Non-profits Act, stated,  “We all agree we need to modernize our nation’s overtime rules, but small businesses, nonprofits, and colleges and universities should not be hurt in the process. The department needs to abandon this flawed rule and pursue the balanced approach we’ve been fighting for from the start. Instead, they are forcing those who have to deal with the real-world consequences to make significant changes before an arbitrary December deadline. While the department continues to ignore widespread concerns, the House has taken an important bipartisan step to provide hardworking Americans more time to implement this expansive rule. The administration should do the right thing and approve this much-needed delay.”

This legislation now goes to the US Senate which is also controlled by a GOP majority. The big hurdle will be the Executive Branch signature. Given the Obama Administration’s support for labor, there is a big question as to whether they will agree to any change to the DOL rules at this time.

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