TAB joins effort to fight new overtime rules

TAB is advancing efforts to replace  the Obama Administration’s new overtime rules slated to take effect December 1 with a phased-in approach that would increase the salary threshold in four stages over five years. The effort is supported by 406 other business groups from across the nation and centers on legislation authored by Sen. Lamar Alexander, R-Tennessee.

Acknowledging that a responsible increase to the salary threshold is due we contend that, the Department of Labor’s immediate increase of more than 100 percent would have a disproportionate impact on a wide variety of industries, sectors and geographic areas of the country. We further object to the provision of the DOL’s final rule which allows for the threshold to automatically ratchet up every three years without regard for prevailing economic conditions or input from affected businesses.

Alexander’s bill, S. 3464, would initiate the phase-in on December 1 with a substantial salary threshold increase to about $36,000. That increase would be followed by a “pause year” in 2017 to allow employees to review and adjust for the consequences of the new rule. Further increases to the salary threshold would occur annually thereafter until reaching the DOL’s planned new threshold of $47,476 on December 1, 2020.

The measure also would prohibit the automatic increases contained in the DOL’s new rule and require the federal agency to propose changes in the future through the customary notice and comment process.

Another key provision specifies that increases after 2016 would not go into effect for non-profit organizations, colleges and universities, health care providers dependent on Medicare and Medicaid, and state and local governments unless the DOL can certify that the 2016 increase did not negatively impact these organizations.

While many groups have called for outright repeal of the new measure, President Obama would assuredly veto such a measure. The overtime threshold hasn’t changed in decades and political observers believe the President considers this measure part of his enduring legacy after his term ends in January.

Questions? Contact TAB’s Oscar Rodriguez or call (512) 322-9944.