Law360, Washington (September 28, 2016, 10:32 PM EDT) — In the face of a presidential veto threat and numerous Democratic objections, the U.S. House of Representatives voted 246-to-177 Wednesday to delay by an additional six months the U.S. Department of Labor’s rule raising the threshold for exemption to overtime pay.
The rule, which is set to take effect Dec. 1, would raise the minimum salary threshold required to qualify for the Fair Labor Standards Act’s so-called white collar exemption to $47,476 per year, more than double the current threshold of $23,660. The Regulatory Relief for Small Businesses, Schools and Nonprofits Act, introduced by Rep. Tim Walberg, R-Mich., would delay the rule until June, if the Senate were to also pass it and if it were signed by the president.
Backers, such as Rep. Rob Woodall, R-Ga., acknowledged that the rule was a necessary update to a standard that has not been touched for more than a decade, but said it has gone through too quickly.
“I don’t believe that there is a single member in this chamber that doesn’t believe those numbers should be adjusted, but to double them overnight with virtually no warning to the small business community, the nonprofit community, the education community, is not the right way to govern,” Woodall said.
Since it was unveiled, business groups and congressional Republicans have been quick to criticize the measure, arguing it would burden businesses and could force employers to demote salaried workers or ultimately cut services and lay off employees. Officials from 21 states and more than 50 business business groups, including the U.S. Chamber of Commerce, filed two lawsuits earlier this month in Texas federal court challenging the rule.
Walberg said his bill passed by the House on Wednesday allows for additional time for nonprofits, businesses and colleges to avoid staffing or service cutbacks or unintended consequences like tuition hikes caused by a “fundamentally flawed rule that will do more harm than good.”
Democrats such as Rep. Jim McGovern, D-Conn., shot back that Walberg’s measure was a “terrible misguided bill” that would “undermine regulation put forward by this administration to help working families.”
Officials in the Obama administration have said the change was needed because the current standard, last revised in 2004, is outdated and no longer does its job of helping to separate workers who should be getting overtime from those who should be exempt. The DOL has estimated that as many as 4 million workers could be affected.
The administration echoed that argument in a veto threat issued Tuesday, saying the rule reflected the input of hundreds of thousands of commenters and already provided a six-month preparation time for employers.
“While this bill seeks to delay implementation, the real goal is clear — delay and then deny overtime pay to workers,” the statement said. “With a strong economy and labor market, now is a good time for employers to provide these essential protections for workers who cannot afford to wait.”
On the floor Wednesday, McGovern decried the bill, saying all it would accomplish would be to deny workers an estimated $6 million in compensation they would be due.
–Additional reporting by Jess Davis and Matthew Bultman. Editing by Philip Shea.
