House Committee to Hold Oversight Hearing on DOL Overtime Rules

The House Education and Workforce Committee will hold an oversight hearing on June 9 entitled: “The Administration’s Overtime Rule and Its Consequences for Workers, Students, Nonprofits, and Small Business.” The hearing will examine the impacts that the new Department of Labor overtime rule that the Obama Administration released on May 18, 2016, will have on businesses throughout the United States.

The new rule will increase the salary level under which workers are eligible for overtime pay, from $455 per week ($23,660 per year) to $913 per week ($47,476 per year), and allow for this threshold to be automatically adjusted every three years.  Additionally, the higher salary threshold for exempting “highly compensated employees” from overtime pay will be raised from $100,000 per year to $134,004 per year, and employers may include bonus compensation as up to 10% of an employee’s salary for purposes of calculating non-“highly compensated employee” pay (previously this pay was excluded from calculation).

The updated overtime rule will go into effect on December 1, 2016, for all employers.  The Administration’s changes to the rule came after an initial proposal in 2015 which would have increased the lower salary threshold to $50,440 for a worker to be eligible for overtime.

Business organizations such as TIA, the U.S. Chamber of Commerce, the National Retail Federation, and others opposed the increase on the grounds that these salary thresholds will harm private sector employment and make workplaces less flexible for employees.  Further, this rulemaking will have a disproportionate impact on employers in rural areas or parts of the country where costs of living are lower and where few salaries reach the exemption level.  Employees in those areas will be forced to work on an hourly basis as a result of this rulemaking.

TIA is fully supporting the Protecting Workplace Advancement and Opportunity Act, which is S. 2707 in the Senate and H.R. 4773 in the House.  This bill would provide statutory protections for employers and workers who will be harmed by the dramatic increase in the overtime pay thresholds.

This Act will nullify the final rule and require the Department of Labor to conduct an economic analysis on the impact that increasing the mandatory overtime salary threshold will have on small businesses, non-profit employers, and public entities.  This Act will also statutorily prohibit the automatic increase of the salary threshold that is included in the final rule.  The overtime pay threshold has never been subject to an automatic increase before, and it is important that Congress and the American public have an opportunity to carefully consider the impacts on small business of any future increase.

To support TIA and your business, please consider giving to the TIAPAC. TIA will actively use PAC contributions to support Members of Congress that are supportive of our position of less government regulations, and attempt to sway some of those Members on the fence. Please contribute HERE.

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