The proposal would block the rule, which increases salary thresholds for exempt employees, from taking effect. The rule also faces legal challenges from business groups.
06/12/2024 2:25 P.M.
2 minute read
Republican members of the House and Senate have introduced a bill under the Congressional Review Act (CRA) to prevent the U.S. Department of Labor’s (DOL) overtime rule from taking effect.
U.S. Rep. Tim Walberg, R-Mich., and U.S. Sen. Mike Braun, R-Ind., introduced H.J. Res. 166 under the CRA, according to a news release.
The DOL’s rule is set to take effect July 1, 2024.
In May, the DOL announced the revisions to the Fair Labor Standards Act (FLSA) regulations, “increasing exempt employee salary thresholds, resulting in an estimated 4 million additional employees becoming eligible to receive overtime,” according to a client alert from Brownstein Hyatt Farber Schreck.
The DOL emphasized that the new thresholds provide clear and predictable guidance for employers and are intended to “ensur[e] that lower-paid salaried workers receive their hard-earned pay or get much-deserved time back with their families.”
The rule, “Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees,” updates regulations under the FLSA “implementing the exemption from minimum wage and overtime pay requirements for executive, administrative, and professional employees,” ACA International previously reported.
The rule increases the minimum salary threshold for the white-collar exemptions from $684 per week ($35,568 per year) to $844 per week ($43,888 per year) on July 1, 2024, and $1,128 per week ($58,656 per year) on Jan. 1, 2025, according to Brownstein.
The yearly salary threshold for the highly compensated employee exemption will increase from $107,432 to $132,964 on July 1, 2024, and to $151,164 on Jan. 1, 2025, Brownstein reports.
Walberg said in the news release the rule is “overburdensome,” and “small businesses, nonprofits, and colleges across America will now be looking at bottom lines, and then make the tough decisions to lay off valuable staff or force salaried workers into hourly positions.”
If the legislation passes, President Joe Biden is expected to veto the bill.
Additional opposition to the rule comes in a lawsuit from business groups, claiming the DOL exceeded its authority in developing the rule.
The lawsuit, filed in the Eastern District of Texas, says the Department of Labor violated the Administrative Procedure Act, ACA previously reported.
Legal scrutiny of the rule was expected, and similar rules were proposed during the Obama administration and Trump administration that faced challenges in court.
Despite the opposition to the rule, employers should review the requirements for salary thresholds and identify employees who will be impacted.
Read more tips for preparation here: U.S. Department of Labor Raises Exempt Employee Salary Thresholds.
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