Election too late to change overtime ruling — maybe
November 21, 2016
Will a new president of the United States spell the end of changes to the overtime rule made by the outgoing administration?
A revision of the Fair Labor Standards Act was proposed by President Barack Obama in a presidential memorandum signed in March 2014.
When he announced it, Obama said the outdated rule meant some salaried workers were working overtime and making less than the federal minimum wage.
“I’m directing Tom Perez, my Secretary of Labor, to restore the common-sense principle behind overtime: If you go above and beyond to help your employer and your economy succeed, then you should share a little bit in that success,” he said during a press conference.
The Final Rule, or overtime rule, was published by the Department of Labor in May 2016 and goes into effect Dec. 1.
The change more than doubles the exemption threshold for overtime pay from $23,660 a year to $47,476 for most salaried “white collar” workers.
That means that most businesses and many nonprofit organizations will be required to pay time-and-a-half for hours worked over 40 hours in a week by those workers making $47,476 or less annually.
The rule is expected to affect 4.2 million employees.
“No one opposed increasing the minimum, it had been $23,660 for a long time, but not to be bumped up by more than double,” said Mark Tulman, business development representative, Nevada Association of Employers in Reno.
Tulman says the change will particularly affect businesses with shift work, including restaurants, distributors and manufacturers.
When the new rule was published, Republicans in Congress slammed it, saying the changes would cost jobs and result in benefit cuts for workers.
“President Obama is rushing through regulations — like the overtime rule — that will cause people to lose their livelihoods. We are committed to fighting this rule and the many others that would be an absolute disaster for our economy,” said Speaker Paul Ryan, R-Wis., at the time.
In September, the U.S. House passed the Regulatory Relief for Small Businesses, Schools and Nonprofits Act to delay the rule by six months in order to give employers more time to implement it.
The bill is now in the U.S. Senate. Even if it passes, the president has said he will veto it.
Also in September, Nevada and 20 other states filed a lawsuit challenging the new rule.
On the same day, over 50 business groups led by the U.S. Chamber of Commerce and the National Association of Manufacturers filed a suit as well in the same Texas court and in October the judge agreed the suits could be combined.
“The U.S. Chamber is pursuing all options for keeping the overtime regulation from taking effect. … We are also continuing to promote legislative options, and ultimately we hope the incoming administration will be interested in revisiting this regulation through an additional rulemaking which will require several months to complete,” said Randy Johnson, senior vice president of Labor, Immigration, and Employee Benefits for the U.S. Chamber of Commerce. “Unfortunately, unless the court blocks the regulation from taking effect on December 1, employers will have implemented their compliance plans which will make revising the salary threshold very difficult.”
Donald Trump, president-elect, said during his campaign that if he won the election he would review federal regulations and change or get rid of those he deemed to hurt business.
“We have to address the issues of over-taxation and over-regulation and the lack of access to credit markets to get our small business owners thriving again,” Trump told the news site Circa in August. “Rolling back the overtime regulation is just one example of the many regulations that need to be addressed to do that.”
In the meantime, businesses and nonprofit organizations have to comply with the new rule as soon as it goes into effect.
A statewide coalition of 12 local groups that work with the state’s nonprofits, will be discussing the final rule and its effect on Nevada charities at its quarterly meeting this month.
“It is one of the biggest things on our agenda,” said Kathy Bartosz, executive director, Partnership Carson City.