Labor Department’s New Overtime Rule Takes Effect Dec. 1

NATSO members are reminded that on Dec. 1, 2016, the Department of Labor’s new overtime rule that doubles the minimum salary threshold that employees must earn to be exempt from overtime pay is scheduled to take effect.

The new rule, issued in May, increases the minimum salary threshold that employees must earn to be exempt from overtime pay to $47,476/year ($913/week), up from the previous salary of $23,660 ($455/week). This number will be automatically updated every three years based on wage inflation. The new rules do not change the so-called “duties test” applicable to employees who earn more than this salary threshold. 

NATSO has prepared a detailed analysis and compliance guide for truckstops and travel plazas that NATSO members may access here.

Although NATSO members should be prepared to comply with the new rule Dec. 1, NATSO continues to advocate for reforms to the rule that would make it easier to business owners and operators to adjust to the increased labor costs.

Specifically, NATSO has been pushing to have a "policy rider" attached to year-end legislation that would fund the government into 2017. President Obama has threatened to veto measures seeking to weaken the overtime rule. However, it remains an outside possibility that the President would sign a large, comprehensive spending package even if it somewhat undercuts the overtime rule.

In October, NATSO joined more than 400 organizations representing a broad spectrum of the national economy and employing millions of employees in expressing support for S. 3464, the Overtime Reform and Review Act, which would provide employers significant relief from the negative impacts of the Labor Department’s final overtime rule.

The legislation, introduced by Sen. Lamar Alexander (R-Tenn.), Chairman of the Senate Committee on Health, Education, Labor and Pensions, would substantially ease the burden that businesses would face in trying to comply with the new overtime rule by phasing in the new salary threshold in four stages over five years, beginning with a salary threshold increase to nearly $36,000 on Dec. 1. It also would provide employers with a one-year reprieve in 2017, allowing them to adjust for the consequences of the new rule. Further increases to the salary level would occur annually thereafter, until the threshold reaches $47,476 on Dec. 1, 2020.

The legislation further prohibits automatic increases to the salary threshold, but allows DOL to propose changes to overtime regulations in the future through the customary notice and comment process.

S. 3464 faces an uphill battle, however efforts to support legislation that modifies the rule rather than nullifies it is designed to garner more Democratic support.

Tiffany Wlazlowski Neuman's photo

Tiffany Wlazlowski Neuman

Tiffany Wlazlowski Neuman develops and executes communications strategies to advance NATSO’s public relations and advocacy goals. Tiffany also develops and oversees partnerships related to the NATSO Foundation’s public outreach initiatives. Tiffany lives in the D.C. metro area with her husband and their two sons.More
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