DOL Releases Final Overtime Ruling
Months of anxious waiting have come to an end – the Department of Labor (DOL) last week released the final revisions to its overtime exemption rule. The new rule, which takes effect December 1, doubles the exempt employee annual salary threshold from $23,660 to $47,476. DOL estimates that the change will impact 4.2 million workers.
Under current rules, full-time, salaried workers who make at least $23,660 per year may be exempt from overtime pay. DOL’s initial proposal would have increased that floor to $50,440, more than a 110% jump. Additionally, the proposal called for automatic increases to the salary threshold, a large bump on the “highly compensated employees” (HCEs) threshold ($100,000 – 122,128 annually) and also sought feedback for changes to the duties test and nondiscretionary bonuses.
The final ruling inches back from the proposed rule, but the threshold still remains more than double the current level, at $47,476, or $913 per week. The threshold for HCEs also soars to $134,004. The new thresholds will also be set to increase automatically every three years.
These changes come as a big win for labor groups, which have been pushing for an update to the current overtime rules. The hope is that the additional pay will help many laborers lift their families out of poverty – as proponents of the new rules claim the current salary threshold is too close to the poverty level for a family of four.
Many chambers and small business owners expressed concern over the problems that the new regulations may cause. They claim that rather than boosting pay, many workers will find their hours cut, benefits rolled back or flexibility decreased in order to avoid or offset having to pay additional overtime. The administrative burden is also of significant concern – with organizations having to assess each employee’s new eligibility, and in the case of those who will remain below the threshold, time and hassle of tracking and reporting time.
The Lubbock Chamber quickly expressed their “disappointment” over the final ruling, saying the federal government may have been hasty in making their decision before a study of the full economic impact could be done. Likewise, the Columbus Chamber issued their own statement of concern about the impact on small businesses and the workers they employ, also suggesting the Secretary of Labor should “conduct a detailed and extended economic analysis."
Compliance will be a major concern for businesses of all sizes, and many chambers will help educate their members. The Greater Des Moines Partnership and other chambers have already announced seminars and trainings around the new rules to help member businesses understand what they will be required to do – to assess their employees for raises, reclassification, or other changes.
Still, some hope to block or adjust the new rule before it goes into effect at the end of the year. Lawmakers in the House and Senate also introduced last week the Protecting Workplace Advancement and Opportunity Act, in order to ensure what they call a more “balanced and responsible approach” to updating the federal rules. House Subcommittee on Workforce Protections Chairman, Tim Walberg (R-MI) stated “Our nation’s outdated overtime rules are in need of modernization, but it must be done in a responsible way that doesn’t stifle opportunities for working families to get ahead.” Stay tuned to the ACCE Government Relations Division for more on that.
In the meantime, several organizations have provided resources that may be helpful to chambers and their members:
- Society for Human Resource Management FLSA Overtime Rule Resources
- The DOL has provided guidance specific to nonprofits on the new pages: overview and guidance.
- Venable LLP has a an overview webinar covering all relevant FLSA rules in this area as they apply to nonprofits and also tips on governing compensable time for non-exempt employees.
Erksine Bowles and Fix the Debt
A huge thank you to the State Chamber Policy Center for allowing ACCE's Government Relations Division to participate on Tuesday's call with Erskine Bowles. If you were unable to join the conversation, please review the links below for more information.
From the State Policy Center:
The Policy Center would like to thank Erskine Bowles and the Fix the Debt campaign for speaking to our members on Tuesday regarding the long-term federal debt and how to get our fiscal outlook under control. In April, Erskine Bowles and Alan Simpson released “A Bipartisan Path Forward to Securing America's Future” (download the summary or full report). They describe their report as “not our ideal plan, it is not the perfect plan, and it is certainly not the only plan. It is an effort to show both sides that a deal is possible; a deal where neither side compromises their principles but instead relies on principled compromise. Such a deal would invigorate our economy and demonstrate to the public that Washington can solve problems, and leave a better future for our grandchildren.” For more information see the two-page summary (pdf) of what Fix the Debt is calling for from the upcoming budget conference committee and an op-ed published in the Washington Post.
The Fix the Debt campaign now has chapters in all 50 states.
Shaun Lumachi Memorial
On Dec. 3 the chamber and government relations profession lost a great friend, Shaun Lumachi, who was fatally injured in a car crash in Florida.
Shaun was a frequent contributor to ACCE, most recently as a workshop speaker at the convention in Los Angeles and a webinar presenter in October. Here is a round-up of his memorable posts and articles from his history as an ACCE contributor.
A public celebration of Shaun’s life has been set for Dec. 17.
Talking Policy in Nashville
Two weeks ago, a group of 21 metro cities government relations professionals gathered in Nashville for two days of roundtable discussion. You can read the official recap here, but here are photos from our trip to Nashville.
Policy, politics and chamber specifics dominated the discussion with a strict “what happens in Nashville stays in Nashville” code for conversation confidentiality.
“The gathering had the perfect mix of peer-to-peer discussions for those of us in the trenches every day running campaigns and crafting policies that support economic vitality, said George Allen, senior V.P., Greater Seattle Chamber of Commerce. “ We shared backstage secrets for victories and hard-earned lessons from disasters. I left Nashville with new political tools and engagement strategies, not to mention some country music CD’s that simply blow me away. Thanks Nashville!”
“I appreciate the opportunity to meet and share ideas and insights with my Metro Chamber colleagues in a roundtable environment,” said Rob Bradham, V.P., public strategies, Chattanooga Chamber. “Our metro areas face many of the same challenges, and exchanging ideas with my counterparts allows me and my chamber to better serve our members and investors. The interaction allows each of us to sharpen our professional abilities and therefore strengthens our profession.”
“The ACCE Government Relations conference was an absolute home-run,” said Jay Barksdale, V.P., public policy, Dallas Regional Chamber. “I’ve been a public affairs professional for many years, but am relatively new to the chamber world. Spending time with colleagues from around the U.S. who face similar challenges and experience the same rewards of this job was the best professional development in which I have participated. I can’t wait to see this talented and motivated group again!”
For a detailed write up, visit the official ACCE news story.