The American Institute of CPAs (AICPA) and state CPA societies have written Congress urging support for H.R. 5813, the Overtime Reform and Enhancement Act (OREA), whose goal is easing the immediate burden of the Department of Labor (DOL) final overtime rule so that it is less disruptive to businesses throughout the nation. The AICPA has been actively engaged in exploring ways to make the rule less disruptive to businesses throughout the nation and believes H.R. 5813 is the best legislative approach to modify the rule before it takes effect later this year.
The bill was introduced by Representative Kurt Schrader (D-Ore.) to reduce the initial shock of compliance by employers and firms with the final overtime rule, which includes a doubling of the salary threshold for white-collar salaried employees on December 1, 2016. H.R. 5813 would instead increase the salary threshold gradually over a three-year period ending in 2019. The bill would also eliminate the provision in the rule to automatically update the salary threshold every three years, thereby preventing DOL from setting a new salary threshold without public input.
AICPA President and CEO Barry C. Melancon, CPA, CGMA, wrote in the August 18 letter, “While the AICPA appreciates the importance of ensuring that government regulations regarding overtime reflect the evolving workplace, to require firms, businesses and non-profits to meet a significant threshold increase by December 1, 2016, creates a substantial burden to employers. This burden will be felt most acutely by smaller firms and organizations, particularly those in rural areas.”
Increasing the salary threshold gradually “allows employers the necessary time to ensure that they are in full compliance with the regulation and to assess their affected employees so as to make sound decisions on how best to absorb the new requirements,” Melancon stated. And, eliminating the rule’s provision for automatic updates to the salary threshold every three years “ensures that DOL has the information necessary to continue to update the overtime rule as intended under the Fair Labor Standards Act,” he wrote.
More than 30 state CPA societies have sent letters to the offices of more than 335 members of Congress asking that they co-sponsor H.R. 5813. A larger number of co-sponsors demonstrates support for the bill and increases the likelihood that House leaders will bring the bill to a vote.
For information about earlier AICPA action regarding the DOL rule, read the story in the May issue of The CPA Advocate.