House Votes to Delay Overtime Rule

Last night, the U.S. House of Representatives passed the Regulatory Relief for Small Businesses, Schools, and Nonprofits Act (H.R. 6094), which would delay implementation of the Department of Labor’s (DOL) new Overtime Rule for six months. However, the Obama administration issued a statement on Tuesday threatening to veto the bill. If compromise legislation is not enacted after Congress returns from its election break in November, the overtime rule will take effect on December 1.

The House vote in favor of the bill was 246 to 177. Five Democrats joined Republicans in support of the legislation. Rep. Kurt Schrader (D-Ore), a proponent of changes to the rule, voted against it.

In July, Schrader introduced the Overtime Reform and Enhancement Act (H.R. 5813), which would phase in the new threshold over a three-year period, beginning with a 52-percent increase this December and more gradual increases in 2017, 2018 and 2019. The legislation would also remove the automatic increase to the threshold.

Last week, more than 50 business groups, including the U.S. Chamber of Commerce, National Retail Federation and National Federation of Independent Business (NFIB), filed suit in federal court to block changes to the Overtime Rule. The coalition filed its case in United States District Court for the Eastern District of Texas. Twenty-one states have also filed a lawsuit challenging the rule.

Both lawsuits state that DOL abused its authority by increasing the salary threshold drastically and failing to account for regional variations in the cost of living. The suits also claim that the agency violated federal law by indexing the salary threshold to the 40th percentile of income, with automatic increases every three years.

On December 1, the rule increases the salary level under which full-time salaried supervisory employees qualify for overtime pay from $455 per week ($23,660 annually) to $913 per week ($47,476 annually). It also automatically updates the threshold every three years.