NASE News

NASE Supports Phased in Approach to Overtime Regulation

The National Association for the Self-Employed voiced its strong support for the Overtime Reform and Enhancement Act, a bill that will update the overtime rules while allowing universities, non-profits, and businesses the necessary time to be able to plan and comply with the new rule.

In May 2016, the Department of Labor announced its final overtime rule, which increases the salary threshold for overtime eligibility by 100% to $47,476. Currently, all employers must comply by December 2016 with the DOL’s new overtime salary threshold which will have a significant impact on our nation’s small business community, from costs to labor management.

The Overtime Reform and Enhancement Act, introduced and sponsored by Rep. Kurt Schrader (D-OR), would update the Department of Labor’s (DOL) overtime rule giving universities, non-profits, and businesses the necessary time to be able to plan and comply with the new rule by phasing in of these new regulations over time, and provide businesses an opportunity to comply.  This phased system would guarantee small businesses a fair chance to protect their employees and plan for future regulatory costs. It is essential that a serious new rule such as this gives the small business community adequate time to prepare.

After the initial overtime increase set for December 2016 to $35,984, a three-year annual phase in process initiates to gradually meet the DOL’s new overtime salary threshold. The bill also eliminates the automatic three-year increase to the salary threshold established under the new rule. The bill recognizes that future administrations can and should update the overtime rules, as they are required to under the Fair Labor Standards Act, but limits the ability of the DOL to update the rules on autopilot. This will allow stakeholders to comment on proposed changes and require the DOL to ensure the rules are working as intended.

Katie Vlietstra is NASE’s Vice President for Government Relations and Public Affairs.