WASHINGTON — Retailers lauded a bill passed by the House of Representatives on Wednesday night that would delay the implementation of the Obama administration’s new overtime rule.
The House passed the “Regulatory Relief for Small Businesses, Schools and Nonprofit Act” on a vote of 246 to 177.
The bill seeks a six-month delay in the Department of Labor’s new controversial overtime rule that is set to take effect on Dec. 1.
It is unclear if the Senate will take up the legislation before lawmakers leave town to continue campaigning ahead of the elections. President Obama has threatened to veto the bill.
Retailers and business groups have strongly opposed the DOL’s move to extend overtime pay to more workers.
“Lawmakers from both parties recognize that the administration’s radical changes to overtime rules are too much, too fast,” said David French, senior vice president for government relations at the National Retail Federation. “Pushing ‘pause’ on implementing these one-size-fits-all regulations would provide welcome breathing room for retailers large and small struggling to comply with the changes during the holidays, their busiest time of the year.”
The NRF urged the Senate to also approve the bill to “help millions of employers and employees by stepping in to help fix or delay the overtime rules.”
An NRF spokeswoman said the industry group is working with the Senate to pass legislation and is optimistic it will take action before Dec. 1.
Retailers and other business groups have also filed a lawsuit challenging the DOL’s rule, charging the agency overstepped its statutory authority in issuing the regulation and violated the Administrative Procedures Act.
The NRF said research conducted for the group showed that overtime regulations will “force employers to limit hours or cut base pay in order to make up for the added payroll costs, leaving most workers with no increase in take-home pay despite added administrative costs.”
It also pointed a separate survey it conducted that found the majority of retail managers and assistant managers the regulations are supposed to help oppose the plan.
The DOL’s new regulation, unveiled in May, will double the salary threshold of workers eligible for overtime pay to $47,476 a year from the current $23,660 a year.
The change in the salary threshold is expected to expand overtime pay and protection to an estimated 4.2 million workers who are currently not eligible under federal law. It is also expected to boost wages for workers by $12 billion over the next 10 years, according to the White House. The threshold will be tied to an index of salary growth and increase every three years.
Under the Fair Labor Standards Act, hourly wage workers are generally paid time-and-a-half for more than 40 hours a week if they earn below a certain salary, but a white-collar exemption has prevented many salaried executives, managers, supervisors and administrators from receiving overtime, according to the Obama administration. The threshold for overtime eligibility was set at $455 a week, or about $23,660 a year, in 2004.
The administration issued a statement of administrative policy threatening to veto the Republican-backed bill, arguing that it “[endangers] a critical step toward promoting higher pay and [undermines] efforts to allow workers to better balance their work and family obligations.”
“While this bill seeks to delay implementation, the real goal is clear—delay and then deny overtime pay to workers,” the administration said. “With a strong economy and labor market, now is a good time for employers to provide these essential protections for workers, who cannot afford to wait.
“Since its creation, the 40-hour workweek has served as a cornerstone of the middle class,” the administration said. “Yet over the past several decades, overtime protections have eroded as a result of inflation and lobbyists’ efforts to weaken them. Today, only 7 percent of full-time salaried workers qualify for overtime based on their pay, down sharply from 62 percent in 1975. This means that more and more low- and middle-income workers are being forced to work extra hours without being paid for them.”