House Votes to Delay Overtime Rule; More Comprehensive Relief Needed

Filed in Advocacy, Codes and Standards, Labor, Legal by on September 29, 2016 6 Comments

overtimeclockThe U.S. House of Representatives on Sept. 28 voted to delay the Department of Labor’s (DOL) controversial overtime rule by six months. The Regulatory Relief for Small Businesses, Schools and Nonprofits Act (H.R. 6094) would push the effective date of the overtime rule from Dec. 1, 2016, to June 1, 2017.

This spring, the DOL issued a final rule that will double the current overtime salary limit from $23,660 to $47,476. The rule further stipulates that the salary threshold will be pegged to inflation and automatically adjusted every three years.

Though a six-month delay would be helpful as employers attempt to comply with the new regulation and absorb its impact, NAHB firmly believes that stronger legislative action is needed to reduce the harmful effects of this rule on the nation’s small business community.

NAHB is member of a coalition of business groups known as the Partnership to Protect Workplace Opportunity (PPWO) to warn lawmakers that such a huge jump in the overtime threshold in such a short period of time could actually hurt a significant number of the workers the rule was meant to help. Many small business owners would be forced to scale back on pay and benefits, as well as cut workers’ hours.

Since the issuance of the final regulation in May, NAHB has led the coalition’s efforts to seek a better legislative solution. Specifically, NAHB is working to find a path forward for the Overtime Reform and Enhancement Act (H.R. 5813), legislation that would provide permanent reform to the Department of Labor’s onerous rule by allowing small businesses operating on tight budgets sufficient time to adjust.

H.R. 5813 would provide a four-year phase-in of the $47,476 salary threshold and eliminate a provision in the rule that requires automatic increases to the overtime salary threshold moving forward.

In a related development, Sen. Lamar Alexander (R-Tenn.), chairman of the Senate Committee on Health, Education, Labor and Pensions, today introduced the Overtime Reform and Review Act. Similar to House bill H.R. 5813, the legislation would gradually ramp up the overtime salary threshold and eliminate the three-year automatic update provision. NAHB commended the legislation in a Sept. 30 letter to the Senator.

Barring passage of H.R. 5813 or the newly-introduced Senate bill, the PPWO supports congressional passage of H.R. 6094 as a temporary measure until permanent relief can be achieved. However, it is unclear if the Senate will vote on H.R. 6094 before the overtime rule goes into effect.

With a Dec. 1 implementation deadline looming, there is little time left for Congress to act to stop or reform the rule. As NAHB works toward permanent relief from this burdensome rule, the association will continue to provide its members with the tools they need to comply with the new overtime requirements.

For more information, contact Suzanne Beall at 800-368-5242 x8407.


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Comments (6)

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  1. This Bill is awful and undermines what the small private business can do to make a reasonable profit. There is no doubt that $23,660 ($ 11.37 per hour) a year for a salary position is way too low, however, $47,476 ($22.85 per hour) is incredibly high – over 100% increase. This jump in compensation is ridiculous and unconscionable. The main issue is that the $23,660 has been stagnate for too long. There needs to be something that will work for both business owners and employee – managers. There is a number that is fair for both parties in a working relationship, especially for entry level supervisors of a company that need training and more experience when being promoted through a company. I believe a fair and economical increase would be to start a minimum salary at $ 33,280.00 per year or equivalent to $16.00 for a 40 hour work week and tie it to the increases of Consumer Price Index – CPI.

    Even a consideration for Overtime at x 1.50 over 50 hours per week.

    David Peabody
    Peabody Landscape Group
    Columbus, Ohio

  2. Rich says:

    I have an idea for you, pay your employees hourly rather than trying to screw them over with salary. Your employees deserve to be able to be home with their families on nights and weekends. If you are going to call them away from their families then you should compensate them with overtime.

    • Darren says:

      Rich, that doesn’t work well for an employee who may have gone home for lack of work with only 15 hours and now they cannot pay their bills. What if their job is outside in the weather and it rains or snows for a couple of weeks and they don’t work, but understand they will need to make it up in the next 3 weeks. Your suggestion was too simplistic and not what my managers like…a steady calculated, predetermined pay check. If they don’t like it we can negotiate it or they can find other jobs? it has to be mutual or it wouldn’t work anyway?

      • Rich says:

        Doesn’t it work out better for the employee if he has a short week this week and works overtime the next week to receive the overtime pay? What you are talking about is in essence comp pay, which violates the overtime rules in an hourly situation. The salary situation is a way for the employer to take advantage of the employee by getting them to work more than 40 hours in a week and escaping overtime pay. The truth is that most of the salaried employees working in the construction industry are not actually eligible for salary according to the NLRA because they are not in a management position. It may be one of the most abused labor laws.

  3. H Crowell says:

    IT MAY BE TRUE THE WAGES ARE TOO LOW FOR MANY PEOPLE. I am an old guy started working for 50 cents a day. I quickly learned a lot about my job and soon my hourly rate was increased to one dollar an hour.
    that was 70 years ago. today we have living costs that have steadily increased and it is partly because the cost of labor has increased.
    As wages increase; if the business is to succeed, the price of the product must increase also.
    Since government got into the wage situation prices have increased so much that a lot of jobs are steadily wilting away because of so many machines that do jobs for people.

  4. Wilson says:

    So many rules. No wonder it has become hard for small businesses lately. Hopefully postponing this will allow more research but I doubt it.

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