Professional Service Agreement

Client Alert — Client Alert – House Votes to Delay New Overtime Rule — But Expect to Still Comply December 1, 2016

October 05, 2016

As most know by now, in May 2016, the Department of Labor (DOL) issued its final rule establishing a new minimum salary threshold for the white collar exemptions under the Fair Labor Standards Act (FLSA). This new threshold of $913 per week ($47,476 annualized) more than doubles the current minimum weekly salary threshold of $455 per week ($23,660 annualized), and is scheduled to increase every three years.

Last week, the United States House of Representatives (House) passed a Bill that would delay the effective date of the DOL’s new overtime rule by 6 months, from December 1, 2016 to June 1, 2017. It is important to understand the significant uphill battle the Bill passed in the House faces before it could become law. First, the Bill must pass the Senate. 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. Even if the Bill is voted on and passes 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. As such, we encourage employers to continue preparing to comply with the new rules by December 1. We will continue to follow the status of the Bill for you and provide updates as new developments arise.