ISSAlert March 18, 2016

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ISSA Opposes Proposed Changes to Overtime Regulations

March 18, 2016                            Contact: Bill Balek

In reaction to recent actions by the U.S. Department of Labor, ISSA has renewed its opposition to the Department’s proposed revisions to the overtime regulations by filing extensive comments with the Office of Management and Budget (OMB) where the proposed regulation currently resides. ISSA and other industry insiders have maintained that the proposed overtime regulations will have a substantial adverse impact on the business community, especially labor intensive sectors. 

ISSA renewed its strong opposition to the proposed changes to the overtime rules in response to DOL sending the overtime rule to OMB’s Office of Information and Regulatory Affairs (OIRA) for their review.  OIRA reviews agency draft and proposed final regulatory actions, and is the last step before a final regulation is issued.  Most importantly, this means a final overtime pay rule could be published as early as 30 days, but could take longer.

Therefore, ISSA, in coordination with the Partnership to Protect Workplace Opportunity, stepped up its opposition to this proposed rule because of the potential adverse economic impact it will have on ISSA members.  A copy of ISSA’s comments are posted online at www.issa.com/dolomb.

Background.  Under the Fair Labor Standards Act, there is a two-part test in order to exempt an employee from overtime pay eligibility. First, the employee has to earn over a certain amount per week/year; and second, the employee has to hold a position that falls within what is known as a “white collar” exemption where the employee performs duties that are executive, administrative, or professional in nature. This second qualification is known as the “duties test.”

The proposed rule seeks to increase the salary threshold from $455/week ($23,660 annually) to $970/week ($50,440 annually). High compensated employees’ salary level would also be increased from $100,000/year to $122,148/year. The proposal also seeks to establish a mechanism for salary thresholds to be adjusted automatically as a function of inflation or a certain percentage of salaried workers.

Such drastic changes imposed in one fell swoop will have a devastating impact on businesses across the nation.