PPAI Lends Its Support To Legislation Delaying Federal Overtime Rules

PPAI has lent its support to bipartisan legislation, including the Regulatory Relief for Small Businesses, Schools and Nonprofits Act (H.R. 6094) and the Overtime Reform and Enhancement Act (H.R. 5813), that would delay and provide relief for new rules issued by the Department of Labor (DOL) addressing some of the most commonly relied-upon exemptions to the Fair Labor Standards Act’s (FLSA) overtime requirements.

The rules are set to take effect December 1. H.R. 5813 would phase in the new overtime rules over a three-year period from December 1, 2016, to December 1, 2019, instead of all at once.

The DOL’s new rules raise the salary amounts employees need to be paid to qualify as exempt and it solicited comments on whether to change the requirements related to the duties necessary for employees to qualify as exempt. The new rules increase the minimum salary threshold from the current level of $455 per week to $913, which many believe will result in surges in costs and losses in employee flexibility.

PPAI expects the rules to have a number of negative effects including job losses, lowering of overall compensation and a move from salary to hourly wage employment. Employers may also have to reclassify some employees to an hourly rate status. Additionally, some observers predict there will be a move to more part-time jobs, outsourcing and automation.

On Wednesday, the House of Representatives passed H.R. 6094, which would delay the implementation of the Department of Labor’s new rules from taking effect on December 1 to June 1, 2017. The bill would allow employers more time to come into compliance with the new overtime rules set by the DOL. It is uncertain if the bill will be addressed by the Senate before it adjourns. PPAI is monitoring the issue and will work with fellow members of the Partnership to Protect Workplace Opportunity to support legislation that limits the impact of these new rules on employers and employees nationwide.

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