From Lower Shore Leader Katarina Ennerfelt 

PROPOSED OVERTIME LAW CHANGES WILL HURT SMALL MANUFACTURERS - A proposal from the U.S. Department of Labor (DOL) would amend the wage and hour regulations to subject many more employees to overtime payments by revising the salary threshold.  


Under current law, an individual must satisfy three criteria to qualify as a white collar employee exempt from federal overtime pay requirements: first, they must be paid on a salary basis (the salary basis test); second, that salary must be more than $455/week ($23,660 annually) (the minimum salary requirement or salary threshold); and third, their "primary duties" must be consistent with executive, professional or administrative positions as defined by the DOL (the primary duties test). Employees who do not meet these three requirements or fail to qualify for another exemption must be treated as "hourly" or "nonexempt" employees and be paid for each hour worked and at a rate of one and a half times their normal hourly rate for all hours worked over 40 in a given work week. The latter is known as overtime pay. To ensure employees are paid for all hours worked and at the proper rate for overtime, employers must carefully track the hours nonexempt employees work.

The proposed DOL rule would revise the salary threshold by 113% to $970 per week (or $50,440 per year), which the agency estimates will be the 40th percentile of earnings for all full time salaried workers in 2016.DOL also proposes automatic annual increases to the salary threshold based on the Consumer Price Index for All Urban Consumers or by pegging the salary threshold to the 40th percentile for weekly earnings of all full time non-hourly (i.e. salaried) employees.  As written, the proposal would subject millions of new employees to overtime pay.  This is particularly troublesome for small businesses or in rural areas where salaries are not as high as elsewhere.

A draft final rule is now under review at the Office of Management and Budget, the last step before publication in the Federal Register.

Senators Tim Scott (R-SC) and Lamar Alexander (R-TN), and Representatives Tim Walberg (R-MI-7) and John Kline (R-MN-2), recently introduced bills in their respective chambers (S. 2707/H,R. 4773, Protecting Workplace Advancement and Opportunity Act) that would prevent DOL from finalizing its rule pending further analysis.

It is very easy for you to send comments to OMB and/or your Members of Congress.  The Partnership to Protect Workplace Opportunity (the business coalition fighting the overtime rule, which the National Association of Wholesaler-Distributors helped organize and now helps manage) has set up a "grass roots portal" on its website, and it's a very simple process to send comments from that site.

Go to: Click on the "Business" button and proceed though the easy-to-follow steps, first for sending a letter to OMB regarding the DOL regulation, and then for sending letters to your Federal legislators in support of the Protecting Workplace Advancement and Opportunity Act. Please take action immediately.