As the Department of Labor’s rule du jour progesses towards passage, many employers are rightfully concerned about the impacts the new “overtime rule” will have on their business. Some of the key points of this rule include: a salary threshold for exempt employees at $50,440 annually, currently $23,660 annually, annual increases to the salary threshold and the duties tests might now require managers to spend most of their on traditional managerial functions. Even a perfunctory review of this new rule points to the challenges employers can face with both the viability and implementation of same. As such, members of the Republican House and Senate have proposed a bill with the intention to prevent the rule from taking effect. “The Protecting Workplace Advancement and Opportunity Act (S. 2707 and H.R. 4773) would:
- Nullify the proposed rule.
- Require the DOL to first conduct a comprehensive economic analysis on the impact of mandatory overtime expansion to small businesses, nonprofit organizations and public employers.
- Prohibit automatic increases in the salary threshold.
- Require that any future changes to the duties test must be subject to notice and comment.”
The major tenets of the bill as listed above seem to be reasonable while the impacts of the proposed rule are determined. The DOL hoped to pass the rule by the end of Spring 2016 but this new bill will likely prevent finalization, if any, until the end of 2016. Either way, employers should be following these proposed changes closely to be as prepared as possible.