DMGS Federal Update


On May 18, 2016, the Department of Labor (DOL) issued its final rule that would increase the salary employers must pay employees in order to be considered exempt from overtime rules.  The DOL estimates that 4.2 million current exempt employees will become entitled to overtime pay.  More information on the final rule can be found here.

Key Provisions of the Final Rule (from Department of Labor website)

The Final Rule focuses primarily on updating the salary and compensation levels needed for Executive, Administrative and Professional workers to be exempt. Specifically, the Final Rule:

  • Sets the standard salary level at the 40th percentile of earnings of full-time salaried workers in the lowest-wage Census Region, currently the South ($913 per week; $47,476 annually for a full-year worker);
  • Sets the total annual compensation requirement for highly compensated employees (HCE) subject to a minimal duties test to the annual equivalent of the 90th percentile of full-time salaried workers nationally ($134,004); and
  • Establishes a mechanism for automatically updating the salary and compensation levels every three years to maintain the levels at the above percentiles and to ensure that they continue to provide useful and effective tests for exemption.

Additionally, the Final Rule amends the salary basis test to allow employers to use nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10 percent of the new standard salary level.

The effective date of the final rule is December 1, 2016. The initial increases to the standard salary level (from $455 to $913 per week) and HCE total annual compensation requirement (from $100,000 to $134,004 per year) will be effective on that date. Future automatic updates to those thresholds will occur every three years, beginning on January 1, 2020.


On June 14, a federal appeals court upheld the ruling that the Federal Communications Commission (FCC) has the power to regulate internet service providers (ISP) similar to the way that it regulates telephone providers.  This means that the FCC can enforce net neutrality rules it previously issued that ban ISPs from giving priority for paid fast lanes.  While it’s a victory for the FCC, ISPs are planning to continue to fight net neutrality rules and Congress is working to pass measures that would cut the FCC’s funding and prohibit it from enforcing the net neutrality rules.   


On June 14, the House passed H.R. 5053, the Preventing IRS Abuse and Protecting Free Speech Act. The bill prohibits the Internal Revenue Service (IRS) from requiring some tax-exempt organizations under the 501(c) tax code to identify their donors.  Currently, non-profits are required to disclose donors’ information if they give over $5,000.  The measure aims to protect the identity of these donors and is in response to the investigation into the IRS over potential targeting of conservative groups.    

Energy and Environment


On May 26, the House failed to pass the Energy and Water Development Appropriations Act, 2016 (H.R. 5055) by a vote of 112 – 305. Providing $37.4 billion in funding, the bill failed due to disagreements over the overall spending levels in the bill and also gay and transgender rights. Several amendments were added surrounding the President’s executive order directing public schools to allow transgender students to use bathrooms based on their gender identity.  The Senate had previously passed its version of the bill on Thursday, May 12. 



On May 17 and May 26 respectively, the House and Senate Appropriations Committee passed their versions of the Defense Appropriations bill.  The full House is slated to take up the bill (H.R. 5293) this week, which provides $ 576.3 billion in spending for defense programs.  Past debates of the bill have included discussion surrounding gay and transgender service member rights as well as discussions on how to curb terrorism.  The bill includes $517.1 billion in base funding and $58.6 billion in Overseas Contingency (OCO) funding.  The bill is expected to pass the House floor, barring any issues over amendments.   

On May 18, the House passed the National Defense Authorization Act.  H.R. 4909 authorizes the funding for the construction of facilities in conjunction of the  Air Force squadron of C-17’s at the 911th Airlift Wing.


On May 19, the FY 2017 Military Construction and Veterans Affairs Appropriations bill (H.R. 4974) passed the full House on a vote of 295 – 129. This legislation provides for funding for housing, training, and equipment for military personnel and their families. It also contains funds for the maintenance of base infrastructure. Finally, this bill funds veterans’ programs and benefits.  Most importantly, the bill provides the $85 million necessary for the C-17 squadron at the 911th

This legislation provides $81.6 billion in discretionary funding, $1.8 billion above FY 2016 levels. Funding for the Department of Veterans Affairs is increased by 3% from FY 2016 level. Additional funds are intended to increase the speed, efficiency, and effectiveness of health services provided to veterans. Military construction funding was $250 million above the President’s request. This additional funding will provide for the contraction and maintenance of family housing, health facilities, and overseas facilities and infrastructures.

Also on May 19, the Senate passed its version of the FY 2017 appropriations bill on a vote of 89 – 8. The bill, H.R. 2577, was a minibus that included funding for transportation, veterans, and $1.1 billion for combatting the Zika virus.  The bill allows Veterans Affairs to recommend medical marijuana to patients in states in which it has been legalized.  The bill passed by the Senate includes $190.1 billion in discretionary and mandatory funds for military construction and veterans, and $114.2 billion for transportation and housing programs. 



On May 19, the Senate passed a transportation funding measure as part of the minibus for transportation, veterans and Zika funding. In addition to the details outlined in the previous section, the bill allows for $74.7 billion in transportation funding, $1.7 billion more than in fiscal 2016 and $2.5 billion less than requested.  The House Appropriations Committee also passed its version of the bill (H.R. 5394) on May 24. 


The House Appropriations Committee is slated to take up the Homeland Security Appropriations bill that was passed by the Subcommittee on June 9th.  The bill will allow for $41.1 billion in spending and increases funding for the Transportation Security Administration (TSA), which has come under fire for long security lines at airports.  The bill also places a ban on the President’s executive actions on immigration pending the outcome of legal challenges.   

On June 14, Senator Bob Casey introduced legislation that would prohibit anyone convicted of a misdemeanor hate crime from purchasing firearms.  Sen. Casey said that he has been working on this legislation for some time but was spurred to introduce it sooner as a result of the unfortunate events in Orlando this past weekend.   

The House Energy and Commerce Committee will take up H.R. 2646, introduced by Congressman Tim Murphy, to address mental health issues.  The bill expands access to psychiatric services for individuals and families in mental health crisis.      


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