As proposed dates have been published and employers braced themselves for the Department of Labor’s (DOL’s) overtime rule to take effect, the House and Senate Republicans interrupted with their introduction of legislation on March 17, 2015 requesting the ruling to be halted at once.
According to SHRM, Senate Health, Education, Labor and Pensions Chairman Lamar Alexander, R-Tennessee posits that “This mandate on employers will hurt the lowest paid American workers the most, by reducing their opportunities for a promotion or a better job and making it all but impossible for workers to negotiate flexible schedules.” Alexander also spotlighted the severity of the problem by stating that the burden on smaller independent colleges in Tennessee alone would be an estimated minimum cost $1.3 million— each! Not to mention the repercussions of the mandate that are sure to include increases in tuition and eminent job cuts.
The current rule as proposed, suggest making exempt employees’ salary threshold $50,440 annually, (an increase of nearly 115% from the current threshold of $23,660). In addition to raising the threshold, the proposed rule call for annual automatic increases to the salary threshold and a more strict duties tests that will require managers to spend at least 50% of their time on management duties.
According to SHRM the new bill’s proposals are as follows:
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.
According to Lisa Horn, the director of congressional affairs with the Society for Human Resource Management (SHRM) and a spokeswoman for Partnership to Protect Workplace Opportunity (PPWO), the proposed legislation “provides a clear vehicle to push back on the overtime rule,” and “Both Republicans and Democrats have expressed concerns about the unintended consequences of this rule, and this bill provides a reasonable approach to updating the overtime rules in a way that works for both employers and employees.” PPWO is a collective group of approximately 60 employer organizations that represent the overall employers’ response to the proposed overtime rule changes.
Lisa Horn also posits that “The rule heading to OMB started the clock, essentially, and this legislation signifies the Hill’s response. “Having just had nearly 200 members on Capitol Hill [March 16] advocating for legislation to address the overtime proposal, SHRM welcomes this development and looks forward to supporting the legislation.” Since the inception of the overtime legislation, SHRM members and other interested individuals have visited Capitol Hill to confer with congressional leaders about the overall impact of this bill on employers.
So…based on the proposed changes it would be prudent to look at various scenarios and be proactive with how the proposed changes may impact how you currently do business today. Human Resources and employment law…never a dull moment!
Have a great weekend and work SMARTER not harder!
For the full SHRM article regarding the “new bill” go to: https://www.shrm.org/legalissues/federalresources/pages/overtime-rule-bill-introduced.aspx
Nicole Bellow, Sr. HR Consultant
Smarter HR Solutions, LLC