House passes bill to delay the overtime law.

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Employment Law and Compliance

The House of Representative passed a bill on September 28th that would postpone the implementation of the new overtime law for six months. Republicans argue that to delay the overtime law gives businesses time to prepare. It will also give the Federal government time to get better information on the effects of the new rules. “I can’t think of a worse Christmas present,” said Rep Pete Sessions, R-Texas, at a House Committee on Rules. Currently the overtime law is set to start on December 1 of this year.  Rep John Kline, R-Minn., said that “More than half the businesses don’t even know the rule is out there.” This could be an expensive mistake. The Department of Labor (DOL) has increased fines and penalties for not complying with the new rules. The bill passed 246-177 with only 5 Democrats voting to delay the bill.

Will the bill to delay the overtime law be enacted?

Before business owners get too excited, there are a few things to know. In order to delay the overtime law, the Senate would have to vote on it and pass it. Additionally, President Obama would have to decide not to veto it. With a majority of Democrats in the Senate, it appears unlikely that the Senate will vote on it. Therefore, even with a vote, it is unlikely that the bill will pass. President Obama stated on September 27th that if it does pass a vote, he will veto the bill.

It seems likely that this bill is mostly a political move. This allows representatives to go back to their constituents, prior to the elections, and tout that they voted to delay the overtime law.

Preparing for the new overtime law

Thus, it is likely that the new overtime laws will take effect on December 1. Businesses will be required to pay employees who make under $47,476 overtime. Exempt employees will also have to pass a duties test to be eligible for exempt status.

First, opponents to the law cite that many businesses and industries are looking at increased part time jobs. They also argue that the results will be a lowering of new hiring wages to compensate for the overtime costs. Furthermore many employees will have to be demoted to an hourly basis instead of a salaried basis. They also cite that this will give employees, who have enjoyed more freedom, less of an ability to manage their time. These employees will loose the ability to adjust for personal and family needs. They claim that to delay the overtime law allows more industries to get ready to be fully compliant after the busiest retail season of the year.

Conversely, proponents of the overtime law believe that millions of dollars in wages will get dispersed to employees who make below the $47,476 wage.

Let SwipeClock Help

For more information on the tools and resources needed to prepare for the new overtime law, contact a SwipeClock partner or representative today.

Written by Annemaria Duran. Last updated September 30, 2016

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