On September 4, NMHC/NAA sent a coalition letter opposing a Department of Labor proposal to increase the salary threshold for white collar workers who are entitled to overtime pay protections under the Fair Labor Standards Act (FLSA). Under the proposal, the salary threshold for executive, administrative and professional employees’ overtime pay would be raised in 2016 from $455 a week ($23,660 a year) to a projected level of $970 a week ($50,440 a year). Millions of workers would be impacted because overtime pay would be determined solely on the basis of falling below the threshold.
The Partnership to Protect Workplace Opportunity requests that the Labor Department withdraw the “overtime rule” because its implementation would:
- Harm the ability of employers to provide, and employees to take advantage of, flexible scheduling options;
- Result in employees being treated differently, although they are in the same job classification (for the same employer), based on regional cost-of-living differences;
- Limit career advancement opportunities for employees;
- Decrease morale for those employees who are demoted to non-exempt status, particularly where peers in other locations remain exempt;
- Reduce employee access to a variety of additional benefits, including incentive pay;
- Deter employers from providing newly-reclassified employees with mobile devices and remote electronic access, further limiting employee flexibility;
- Increase FLSA litigation based on off-the-clock and regular rate of pay claims; and
- Introduce other legal and operational issues, such as increased administrative costs.
The FLSA generally requires employers to pay
employees at least one and one-half times their regular rate of pay for any
hours they work beyond 40 in a workweek. However, an employee is exempt if:
1. The employee is paid a predetermined and fixed salary that is not subject to reduction because of variations in the quality or quantity of work performed;
2. The amount of salary paid meets a minimum specified amount; and
3. The employee’s job duties primarily involve executive, administrative or professional duties as defined by the regulations.
Almost five million white collar workers would become newly entitled to overtime protection because of the increase in the salary threshold. The proposal would also impact about six million white collar employees currently entitled to overtime pay who will have their eligibility clarified as a result of the increase.
A set of FAQs for the proposed regulations is available here.