Home / News / BCA Washington Briefing / Labor Department Releases 508-Page Draft Final Overtime Rule

Labor Department Releases 508-Page Draft Final Overtime Rule

schrayermeeting2016

Liz Schrayer, center, President of U.S. Global Leadership Coalition (USGLC), briefs U.S. Sen. Jeff Sessions, R-Mobile, right, on the importance of strategic investments and diplomacy to advance America’s national security and economic interests in a global world. Attending the meeting was Business Council of Alabama President and CEO William J. Canary, a USGLC Advisory Council member and representative from Alabama. “Alabama exported more than $24 billion in goods and services to foreign markets in 2014,” Canary said. “One-fourth of all jobs in Alabama depend on international trade.”

The U.S. Labor Department has released for public inspection its final anti-business overtime regulation that will be formally unveiled on Monday. While the department made some concessions from its original proposal, the overtime regulation like many from the Administration are of dubious benefit to business.

“While the Department of Labor made some important changes in the final regulation, the revised overtime regulation issued today still represents another regrettable burden being piled on employers as they attempt to grow in a tepid economy,” the U.S. Chamber of Commerce said. “The regulation demonstrates this administration’s determination to control employers instead of creating conditions for economic growth.

“Cloaked in feel-good, self-congratulatory rhetoric, the administration has repeatedly failed to accurately analyze the cost and benefits of its regulations, or the impact its regulatory onslaught will have on job growth,” the Chamber said.

This regulation will hurt businesses but the plaintiff’s bar certainly will be working overtime seeking compensation based on the regulation.

BCA member Maynard Cooper Gale advises employers to act quickly to meet with employment counsel and stakeholders throughout their organizations to determine how the regulations will affect their workplace.

The department did listen somewhat to a coalition supporting U.S. Chamber of Commerce efforts to mitigate some of the regulation’s effect.

“While we remain disappointed in the excessively high salary threshold, the changes made since the proposed regulation reflect points and arguments the Chamber made in our comments, testimony, and meetings with the administration,” the Chamber said. “The U.S. Chamber, with help from many of you in the federation, pushed hard for: a much lower salary threshold; no changes to the duties test; an implementation period no less than 6 months; and no automatic annual updates.”

It’s not over yet. There is legislation to block the rule until Labor can study the economic impact.

Overtime changes include:

The salary threshold will be increased to $47,476 annually, or $913 a week. That’s an increase of slightly more than 100 percent from the current threshold of $23,660 annually, or $455 a week. The proposed level was $50,440 annually, or $970 a week.

There will be no changes to the duties test.

The salary threshold will be updated every three years and will be tied to the 40th percentile of full time salaried workers in the lowest wage region of the country, currently the Southeast.

The proposal had the automatic updates happening annually but was unclear on the methodology for the updates.

Employers will have about 200 days, until Dec. 1, 2016, to come into compliance with the new requirement. The proposal did not include an implementation period but there were suggestions it could be as short as 60 days.

There is no indication about how commissions, bonuses, or incentive-based pay will be treated. The Labor Department sought comments on whether to give a 10 percent credit for these types of compensation.

The 508-page rule can be found here. Once published in the Federal Register, the regulation will be in effect after 60 days.


 

IN CASE YOU MISSED IT

New Labor Regulations Are Negatively Changing Modern Manufacturing
National Association of Manufacturers (Palmieri 5/18) “National Association of Manufacturers Vice President of Labor, Legal and Regulatory Policy Rosario Palmieri issued the following statement after the Department of Labor released the final overtime regulation:

“Manufacturing is a pathway to the middle class for millions of men and women who make things in America. However, this regulation creates barriers to opportunity, severely limiting flexibility and dramatically increasing red tape, especially for small manufacturers who cannot afford the burdens of a 99 percent salary increase for management employees who are exempt from overtime pay. Even worse, the administration has also required there to be future automatic increases, which creates uncertainty in planning for future years.

“Manufacturers take pride in offering entry level jobs that turn into management jobs, but what the administration paints as a pay raise for millions of workers could limit those options for many who strive to be part of management. Time and resources that could be spent on creating jobs and opportunity will now be used in efforts to comply with this rule.

“Unfortunately, this is just the latest in what has been a deluge of regulations from this administration that are fundamentally altering the manufacturing workforce and negatively impacting companies and business owners. If the goal is to fatigue manufacturers and create disincentives to opportunity, then mission accomplished. But if the goal is to enhance our modern workplaces, the administration should work with manufacturers and recognize our unique advantages.

“Manufacturers and their employees share a mutual goal of a safe, communicative and productive workplace, and good policy from Washington is part of the solution. Click here to learn more.

Just When You Thought It Couldn’t Get Any Worse
The Hill Devaney, Wheeler (5/19) “President Obama has released the regulatory agenda for his final months in office. The Unified Agenda includes rules and regulations that federal agencies plan to issue before Obama leaves office in January 2017. Here’s a look at some of the top regulations that are in the works:

“The U.S. Department of Agriculture is considering nutrition labeling requirements for meat and poultry, organic food standards that would govern animal living conditions and horse protections. The Department of Energy is considering new efficiency rules for air conditioners, ceiling fans, computers and battery chargers.

“The Department of Housing and Urban Development is considering a smoking ban in public housing, providing transgender people with equal access to emergency shelters, and construction standards for manufactured homes. The Department of Justice is considering firearms rules, including background checks for law enforcement officers applying for concealed weapons permits, easier access to firearms for non-citizens, and new definitions for pistols.

“The Department of Labor is considering new paid sick leave requirements for government contractors, rules for preventing violence against healthcare workers, construction noise standards, and protections for shipyard and communication tower workers. The Consumer Financial Protection Bureau is considering new rules for overdraft fees and payday loans.

“Obama has sought to use executive power aggressively during his second term to bypass Republicans in Congress who are opposed to most of his legislative agenda. This week, the administration finalized a rule that will extend overtime pay to millions of workers who have not previously been eligible. The rule raises the threshold so that anyone earning up to $47,476 per year qualifies. Business groups have slammed the rule, and Speaker Paul Ryan (R-Wis.) has vowed to fight it.

“Last week, the Food and Drug administration issued a rule asserting the authority to regulate e-cigarettes and cigars, something it has never done before. The Environmental Protection Agency, meanwhile, set stronger standards for methane emissions. The Labor Department has been especially active, finalizing the controversial ‘fiduciary rule’ for investment advisers and a rule that will create an online database of workplace injuries and illnesses.”

House Votes to Delay Obama Ozone Rule
The Hill (Cama 5/18) “A House committee on Wednesday passed a bill to delay the Obama administration’s new ozone pollution rule and change the way the federal government writes future air pollution rules. The Wednesday vote along party lines in the House Energy and Commerce Committee sends the bill to the full House for its consideration. The legislation would delay last year’s ozone rule from the Environmental Protection Agency (EPA) by up to eight years.

“In the future, the EPA would be allowed to consider new rules on ozone and other air pollutants every 10 years instead of every five years, the current time period, and the EPA would for the first time be allowed to consider the costs of new standards, not just the health impacts.

“Rep. Marsha Blackburn (R-Tenn.) said the legislation ‘will allow states to implement EPA’s ozone standards in a manner that is more practical and cost-effective’, and ensures states don’t have to think about how to comply with two standards at the same time. Numerous states and energy interests are suing the EPA with the goal of having the ozone bill overturned, while some environmental groups are suing to have it strengthened.”

About Dana Beyerle

Dana Beyerle
Director of Communications
(334) 240-8768 | Fax: (334) 241-5984
Email Dana Beyerle

Check Also

WOTUS Decision a Win for Manufacturers

The Business Council of Alabama, the National Association of Manufacturers, and businesses across the United …