Yesterday, the United States House of Representatives passed a bill, H.R. 6094 (the “bill” referred to as the Regulatory Relief for Small Businesses, Schools and Nonprofits Act), that would delay the effective date of the Department of Labor’s new overtime rule by 6 months, from December 1, 2016 to June 1, 2017. The Vote passed the House 246-177, with 5 Democrats voting in favor of it. This is just the latest challenge to the DOL’s doubling of the minimum salary threshold for the white collar exemptions (executive, administrative, and professional) under the Fair Labor Standards Act. Business groups, congressional Republicans and State Officials have all criticized the drastic economic impact such a measure would have on businesses.
Before employers start dancing in the streets, it is important to understand the significant uphill battle the bill faces before it could become law. First, the bill must pass the Senate, which will be no easy task. It is very possible that the bill itself may not even reach the Senate floor for a vote. But if it does, passage of the bill is not highly likely given the current make-up of the Senate (54 Republicans, 44 Democrats and 2 Independents who caucus with Democrats). Indeed, we already know that the DOL’s rule in its current form faces some opposition from Democrats given that 5 House Democrats voted for the bill already, and 15 other Democrats introduced a bill in July that would “phase in” the higher salary threshold over a three-year period. Even if the bill survives the Senate, a Presidential veto is almost certain to follow. President Obama released a statement strongly opposing any delay in the rule’s effective date, and threatening to veto any such law. Congress likely would not have enough votes to override any such veto.
So what does this all mean to employers? Given these procedural roadblocks and the impending effective date, most legal observers continue to recommend that employers assume that implementation of the new rule will proceed on December 1, 2016 and to prepare accordingly. We likewise encourage employers to continue their efforts to prepare for a December 1 effective date and get their “house” in order. We will continue to follow this issue and provide updates as new developments arise.
