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October 3, 2016

U.S. House Votes To Delay Labor Department Overtime Regulation

As Connecting the Dots reported in May, the U.S. Department of Labor has proposed a new regulation that would greatly expand the number of workers eligible for overtime. Last week the U.S. House of Representatives voted 246 to 177 to delay implementation of the regulation from this December to next June. Every Republican and five Democrats voted for the measure. While companion legislation has been introduced in the Senate, it is not clear whether the chamber will vote on it, and the White House has said that President Barack Obama would veto the legislation if it reaches his desk.

As a reminder, the regulation:

  • Sets the minimum salary level for exemption at $47,476 ($913/week) and the salary level for the highly compensated test at $134,004;
  • Provides for automatic increases in the salary levels after three years (beginning Jan. 1, 2020), indexed to the 40th percentile of full time salary workers in the lowest wage Census region (currently the South region);
  • Allows employers to count any bonuses paid on at least a quarterly basis toward 10 percent of the minimum salary level; and
  • Does not revise the duties test.

According to Politico’s “Morning Shift,” Sen. Lamar Alexander (R-TN) also has introduced legislation in the upper chamber that would phase in the regulation over five years and would require the Government Accountability Office to undertake a study of the rule’s economic effects. Sen. David Vitter (R-LA) has introduced legislation that would delay implementation two years. 

Also last week: 21 U.S. states filed a federal lawsuit challenging the rule.