By this time, employers should be familiar with the new Fair Labor Standards Act (FLSA) Overtime Rule, which is to be put into effect on December 1, 2016. Since its posting on May 18, 2016 a large group of government officials as well as those in the business community have opposed the rule, citing that it contradicts the Administrative Procedure Act through its considerate change to exemption standards, as well as its automatic indexing factor.

Several state legislators have put forth acts to contest the Department of Labor’s (DOL) approval of the rule, such as proposing the delay of the rule’s effective date for small businesses, schools, and nonprofits or delaying implementation within states affected by major natural disasters.

One approach that appears to be gaining popularity is the idea of phasing in of the new overtime rule. H.R.5813, the Overtime Reform and Enhancement Act pushes for an elimination of the three-year threshold increase while eventually raising the income threshold to $47,476 over a period of four years. Another proposal, the Overtime Reform and Review Act (S.3464), is similar to H.R.5813, but slower, stretching the threshold increases over a period of five years, with no increase for 2017. The belief is that the break in 2017 with leave time for an analysis of the first years’ effect, as well as to help employers adjust to the increases leading up through 2020.

Ultimately, the general consensus is that there is not enough time to block the FLSA Overtime Rule. Time constraints aside, President’s Obama’s Office of Management has reported that he would veto any bill intended to overturn the rule.

Employers should continue to prepare for the rules to take effect December 1, 2016. A report is available in the portal that will display all of your active salaried employees that are being paid below the new salary threshold. Additionally, the report can be delivered via email as an alert based on a frequency of your choosing. Our payroll specialists are ready to assist you with your compliance and overtime management.