29 September 2016

U.S. House Passes Bill to Delay “White Collar” Overtime Rule. But Employers Should Still Plan to Comply by December 1.

Yesterday the U.S. House of Representatives passed a bill to delay for six months the doubling of the minimum salary for the “white collar” overtime exemptions. That increase is scheduled to take effect on December 1. But the bill faces obstacles in the U.S. Senate and a near-certain veto by President Obama. So we encourage employers to plan for a December 1 effective date.

In May 2016, the U.S. Department of Labor changed the regulations governing the overtime exemption for white-collar workers under the Fair Labor Standards Act. The new rule increased – from $455 per week to $913 per week – the minimum salary required for administrative, executive, and professional employees to be exempt from overtime pay.

The increased salary requirement is scheduled to take effect on December 1, 2016. Therefore, by December 1, any employee who is presently covered by one of the white-collar exemptions but receives a salary of less than $913 per week must either (1) receive a salary increase to at least $913 per week, or (2) become eligible for overtime pay.

On September 28, the U.S. House passed the Regulatory Relief for Small Businesses, Schools, and Nonprofits Act (H.R. 6094). This bill would delay the increased salary requirement for six months. The bill now moves to the Senate. If passed there, it will be presented to the President for signature.

While employers may be heartened by this development, it is highly unlikely that this bill will ever be signed into law. It is unlikely that the bill will pass the Senate because of the potential filibuster. Even if the Senate approves the bill, President Obama has expressed strong support for the new rule and will almost certainly veto the bill.

The most likely outcome, therefore, is that the new rule will take effect as scheduled on December 1. We strongly recommend that employers continue their planning and preparation to comply with the new rule by that date. We will continue to monitor the progress of H.R. 6094 and notify you of any important developments.

If you have any questions about this alert, or if you need help preparing for the new rule, please contact your Miller Johnson attorney or the authors of this alert.