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Bill Impedes Progress of DOL Initiative to Expand Overtime Coverage

The House of Representatives put forth the Protecting Workplace Advancement and Opportunity Act, in significant part, to block the Department of Labor's ("DOL") new rule to extend overtime provisions to a more expansive group of workers. If implemented, DOL rule is expected to extend overtime pay to an estimated five million additional workers. The opposition to the rule is premised on the idea that these significant increases would unduly burden small businesses and that DOL rule making is not the appropriate manner in which to do so.

The DOL rule would raise the white-collar income exemption from the existing salaried wage of $455 per week, amounting to roughly $23,660 annually, to an estimated $50,440 per year. The rule would additionally raise the exemption for highly-compensated workers from $100,000 to $125,000 per year. Perhaps more significantly, the controversial rule would allow for automatic increases as the rates would be tied with inflation. Historically increasing these rates required specific action; something that has only happened seven times since the 1938 passage of the Fair Labor Standards Act.

Proponents of the DOL overtime rule suggest that it is necessary to address the inequity of salaried workers earning around $25,000 per year while working between 50 and 70 hours per week. They suggest that in extreme cases, these workers are earning less than minimum wage. While opponents suggest that the rule's passage would not only stifle workplace flexibility, but would also hinder the ability of lower-income Americans to climb the economic ladder.

The legal team at SFMS has significant experience litigating FCA matters. If you have any questions regarding this subject or this posting, please contact Nick Lussier ([email protected]) or Chiharu Sekino ([email protected]). We can also be reached toll-free at (866) 540-5505.

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Vehling, Aaron. "DOL Sends Controversial OT Rule to OMB for Quick Rollout." Law360. Last modified March 15, 2016.

Vehling, Aaron. "Republicans Introduce Bill to Kill DOL's Impending OT Rule." Law360. Last modified March 18, 2016.

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