A bill was recently introduced in the U.S. House of Representatives that attempts to modify the implementation of the U.S. Department of Labor’s (DOL) new overtime rules for exempt employees.
The bill, titled the Overtime Reform and Enhancement Act, was introduced in the House of Representatives on July 14, 2016. It would pro-rate the implementation of the DOL’s new salary threshold of $47,476 ($913/week). Rather than raise the salary level all at once on December 1 of this year, it would be gradually increased on a yearly basis:
The proposed increase schedule would look like this:
December 1, 2016: $35,984 ($692/week)
December 1, 2017: $39,780 ($765/week)
December 1, 2018: $43,628 ($839/week)
December 1, 2019: $47,476 ($913/week)
The bill would also eliminate the automatic three-year increase to the salary threshold as set out in the new rules.
The likelihood that this bill will become law before December 1, 2016 is very low. The bill still needs to clear the committee process, be passed by both the House of Representatives and the Senate. The current political climate makes this an extremely difficult task. The bill also must be signed into law by President Obama. This is unlikely to occur since President Obama was the catalyst for the new regulations when he signed a Presidential Memorandum back in 2014 asking the DOL to update the overtime rules.
MSEC recommends that employers continue to prepare for the final DOL rules and the new salary threshold of $47,476 (913/week) to be implemented on December 1 of this year. If you have any questions, concerns, or need assistance in prepping for this change, please contact MSEC.