Bill Would Delay ‘Other’ Overtime Rule by 3 Years

New legislation was introduced yesterday that may change the way the most recent overtime rule is phased in. When the rule was proposed in May the threshold for employees who are exempt from overtime pay changed from $23,660 to $47,476.

Salaried employees under that new threshold will be entitled to overtime wages. It was originally announced that the change would go into effect immediately on December 1, 2016, but that may not be the case if the bill is passed.

The changes to the overtime rule may not have a huge impact on the home care industry as a whole, mainly because many home care workers are hourly, as opposed to salaried, workers. Still, home care companies that do have salaried employees will have to find a way to track the hours of those whose pay falls under the new threshold—potentially increasing the burden on smaller home care companies.

The Overtime Reform and Enhancement Act, which was introduced by Reps. Kurt Schrader (D), Jim Cooper (D), Henry Cuellar (D) and Collin Peterson (D), would incrementally phase in the new threshold of $47,476 over the next three years. In December, there would only be a 50% increase, rather than switching over the threshold all at once.

“The current overtime threshold is horribly outdated and needs to be raised as both employees and employers navigate our changing economy,” said Schrader. “This bill will do exactly that without disrupting the way businesses operate and employees are paid.”

Come December 1, 2016, the Overtime Reform and Enhancement Act would increase the threshold to $35,984. Each year following, the threshold would be raised by $74 each week until December 1, 2019, when the threshold would reach the proposed $47,476 threshold.

“Work in America has changed greatly in the last few decades,” said Congressman Cuellar. “Today, Americans are working longer hours and are more productive, but salaries and overtime provisions haven’t kept pace. New overtime standards are needed for American workers but we must ensure new and established businesses have adequate opportunity to adapt to these new rules so as not to become overly burdensome with unintended consequences and slow job growth in communities across the country. This bill provides necessary time for adjustment to make sure both workers and employers are ready to progress and make our economy stronger.”

Once reached, the new threshold will be more than double the original. This is the first time that the threshold for overtime exemption has been raised since 2004.

Written by Alana Stramowski