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Update on Overtime Regs

Monday, March 21, 2016   (0 Comments)
Posted by: Marci Myer
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A Message From the National Association of Wholesaler-Distributors 


Unfortunately, but as we expected, the Department of Labor (DoL) is moving ahead with the proposed changes to the Wage & Hour Division’s Fair Labor Standards Act (FLSA) overtime regulations.


Last week DoL sent the proposed regulations to the Office of Management and Budget’s (OMB) Office of Information and Regulatory Affairs (OIRA) for their review.  OIRA is the “central authority for the review of Executive Branch regulations….” and this is the expected next step toward a final rule.


We had previously been told to expect the final rule in July, but it is moving at a much quicker pace, and while there is no specific deadline or timeline for OIRA consideration of the rule, we could see a final rule as early as mid-May.  We believe DoL is pushing for quick action to prevent a possible Congressional Review Act (CRA) challenge to the rule – see the addendum at the end of this message for more information on the CRA.


The specific content of the final rule sent to OIRA is confidential, so we do not know how much, if at all, it varies from the proposed rule on which NAW and many others in the business community submitted comments.  We do not know if the final rule will address the duties test or the issue of allowing commissions and/or non-discretionary bonuses to satisfy part of the minimum salary.  We are certain, however, that the salary thresholds will be increased, and have seen nothing from DoL to suggest that the increase will be appreciably smaller than in the proposed rule. 


OIRA will accept comments and requests for meetings with stakeholders on the proposed rule for an undetermined amount of time, but there is little expectation that they will continue the process for more than 30-60 days at the outside.  NAW will be filing comments with OIRA, focused again on the impact not just on employers but on employees who will be moved from salaried professional to hourly-wage status against their wishes and their best interest.  The Partnership to Protect Workplace Opportunity (PPWO), which NAW helps manage, will also file comments and has already requested a meeting with the OIRA director.  NAW and other trade associations will also be requesting meetings.


We anticipate that when the final rule is released, businesses will probably have 60 days – and almost certainly no longer than 90 – to comply with the new regulation.


Also last week, legislation was introduced in both houses of Congress – the Protecting Workplace Advancement and Opportunity Act – to delay the final regulation and require DoL to first conduct a “comprehensive economic analysis on the impact of mandatory overtime expansion to small businesses, nonprofits, and public employers.”  While the prospects for this legislation being signed into law by President Obama are not great, it is moving on a parallel track with an effort to delay the implementation of the rule through adding language to an appropriations bill restricting DoL’s ability to spend federal revenues advancing the rule.


We wish we had better news to report, we will continue to utilize every available tool to block, change or delay this rule, and we will keep you informed as additional information become available.


The Congressional Review Act Process:


Under the CRA, Congress can pass legislation to reverse specific regulations under an expedited floor procedure – in order words, with a time limit on debate and not subject to a Senate filibuster so it can pass with a simple majority vote.  A CRA resolution must be introduced within 60 legislative days in the House/60 session days in the Senate (not calendar days) of Congress being notified of a new regulation, and a successfully-passed CRA resolution must be signed by the president or his/her veto overridden.   Last year both houses of Congress passed a CRA resolution revoking the NLRB’s “Ambush Election” rule.  President Obama of course vetoed the resolution, and neither house of Congress had the necessary two-thirds vote to override the veto. 


There has been only one successful CRA revocation of a regulation.  In late 2000, in the last months of the Clinton Administration, OSHA proposed very controversial ergonomics regulations.  In early 2001, within 60 session-days of the issuing of the regulation – and after President George W. Bush replaced Clinton in the White House – Congress passed a CRA resolution revoking the Ergonomics regulations, and sent that resolution to President Bush for his signature. 


The parallel for us today is obvious:  If Republicans remain in control of the Congress and if a Republican wins the White House in November, a new GOP president would sign into law any CRA resolutions passed by a GOP-led Congress revoking regulations finalized by the Obama Administration late enough in the year to be within the 60-session-day window. 


It would appear that the Obama Administration is also looking at that calendar, and that they have most likely moved the overtime regulations faster than previously projected in order to prevent a successful CRA challenge.


We will continue to keep you updated.

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