The U.S. Department of Labor (DOL) recently proposed a large increase in the minimum salary threshold for the “white-collar” overtime exemptions (executive, professional and administrative employees).
This would more than double the current threshold and move it from $455 per week to $921 per week or from $23,660 to $47,892 annually. This threshold is to increase annually based on either the national average earnings for salaried workers or the Consumer Price Index. It is estimated that it will be about $50,440 for 2016.
In other words, not only must an employee meet the DOL’s primary duty requirements to be exempt from overtime, an employee must also earn well over the average national wage (or over 30% more than Kansas’s average wage).
This minimum salary threshold may be fine for California, New York or the D.C. area, but what kind of havoc is it going to wreck in rural America where the cost of living is significantly lower and so are the wages?
Think about what kind of impact this is going to have on teachers or professionals. Can you say record keeping nightmare?
Not only will logistics be a problem, but what a slap in the face it is going to be to long-term salaried employees earning less than $50,000 a year to cut their earnings per hour to accommodate sporadic overtime compensation necessities. Or to pay less during a slow week because he/she was an hour short because they went to watch their child at a sporting event? No more consistent paychecks. No more flexible work schedules.
Employees who have not had to punch a time clock for the past 20 years will now have to punch a time clock and keep track of every minute they are in the “office,” not to mention those phone calls they take in the middle of dinner to answer a question from the staff or a client. After all, the DOL does not like self-reported time cards.
If you have an opinion on how this may impact your business or organization, the DOL is still taking comments through September 4 at http://www.regulations.gov/#!documentDetail;D=WHD-2015-0001-0001
Once the comment period is closed, the DOL will finalize the regulations.
Time is short. Let your voice be heard.