NOPA Encourages Members to Review Proposed Changes to Existing Overtime Regulations
Thursday, July 30, 2015
Earlier this month, President Barack Obama released new overtime requirements via the U.S. Department of Labor (DOL). These proposed requirements would apply to any salaried employer who makes up to $47,476. Currently, the cut-off for overtime pay is any salaried worker making up to $23,660.
This is a significant increase for employers and will force many to move their salaried employees to hourly or to tell their salaried worker they cannot work more than 40 hours per week. The association is going to be active in sharing the concerns of our members on this matter.
There are several key provisions that we want to share:
- Guaranteed overtime pay to most salaried workers earning less than $47,476; the salary threshold will be raised from $455/week ($23,660/year) to $913/week ($47,476/year) in 2016.
- Overtime pay and minimum wage extensions are put into place for nearly 5 million workers, 56 percent of which are women and 53 percent of which possess at least a college degree
- Provides clearer rules to help employer/employee decide if overtime pay should be received
- Prevent future erosion of the salary threshold, and overtime pay, due to inflation, by indexing them according to inflation, or wage growth over time
- No regulatory changes to “duties test,” which determines whether salaried workers earning more than the salary threshold are eligible for overtime pay Hourly workers would continue to receive overtime pay under current rules.
Although the Office of Management and Budget (OMB) has reviewed and approved the Notice of Proposed Rulemaking (NPRM), the document has not yet been published in The Federal Register. The NPRM that appears in The Federal Register will specify the dates of the public comment period.
ADMINISTRATION INTEREST IN RELATIONSHIPS WITH INDEPENDENT CONTRACTORS
The Obama administration is also taking aim on the issue of relationships with independent contractors. The administration intends to issue what they call an “Interpretation” document on the issue of independent contractors, an issue that is heating up due to what is called the “sharing economy” – think Uber, the independent taxi service, and Airbnb, where people rent out their homes or apartments to travelers.
The administration’s issuance of an interpretation bypasses public opportunity to comment, which means it really becomes “the law of the land.” While an interpretation doesn’t have the force of law, it will require businesses to sue to win cases filed against them. This means that for companies that use independent contractors, a lot of money could end up being spent fighting this issue in court.
WHAT THIS MEANS FOR YOU:
Headquarters is actively following these issue and will provide members with regular updates. Additionally, Headquarters will be submitting written comments on the proposed change to overtime once it is published. We would strongly encourage all members impacted by this proposed change to submit them, as well.