Feds expected to revise overtime rules
Proposed changes to federal overtime law have lain dormant for most of this year, though they were on the minds of many business owners and managers last year before a court injunction blocked their implementation.
And with a pro-business president in office, many might assume that changes that had been condemned by many business leaders would be finished.
But that may not be the case.
The U.S. Department of Labor is asking for information from business owners around the country, possibly to get details it can use to formulate a revised overtime proposal. That overtime proposal could be unveiled in 2018, said attorney Anne Zerbe, chair of the employment law department at CGA Law Firm in York.
The initial federal overtime regulations were to double the salary threshold — from $23,660 per year to $47,476, or from $455 per week to $913 — under which employees working more than 40 hours a week must be paid overtime.
Many experts agree that the threshold, last updated in 2004, needs to move upward – but not double. And they expect there to be some sort of an increase in that salary level.
In the meantime, federal officials are asking businesses how they prepared for last year’s pending overtime rules, whether they cut employees’ hours or converted workers from salary to hourly, or whether they increased wages and made sure the employees remained exempt, among other inquiries, Zerbe said.
The questions imply the DOL still plans some form of overtime changes, Zerbe said: “They’re really looking for information from employers to see how they should do things differently, and how it (a future change) would have an impact on employers.”
Unlike last year’s changes, which would have begun all at once on Dec. 1, future changes may be phased in, “to allow employers to plan and prepare, in order to make changes that will comply, but which will be appropriate for their industry, without having to make, really, knee-jerk reactions across the board,” Zerbe said.
Employers have until Sept. 25 to give feedback to the DOL, Zerbe said. So far, nearly 50,000 businesses have responded.
She also hopes that future changes will take into account factors like geogragraphic variables in the cost of living.
Last year’s update to the federal overtime regulations came under President Barack Obama, who hoped to boost income growth.
About 4 million workers would have been affecetd by the change, including 185,000 in Pennsylvania.
Opponents contended the rule would have inflated salary and administrative costs for businesses, increasing the likelihood of layoffs. A federal judge eventually ruled that the Obama administration had exceeded its authority by raising the overtime salary limit so significantly.
Karen Young, president of HR Resolutions LLC in Lower Paxton Township, Dauphin County, believes that the current level of $455 a week is too low, but that the proposed limit of $913 is too high.
She suggested a smaller perhaps tied to cost-of-living or other increases, Young said: “Just because the old number doesn’t make sense any more, don’t go and pick some other number that doesn’t make sense.”
From an HR perspective, one good thing that came out of last year’s semi-panic ahead of the new rules was that employers began paying more attention to the proper classification of jobs based on job duties, not just salaries, she said.
“If people are being called ‘supervisors,’ ‘assistants’ or ‘specialists,’ and we have had them exempt, now bosses were saying, maybe they should be paid hourly. Or they were upgrading the job description and upgrading (an employee’s) responsibilities to keep them salaried.
“It’s a win-win either way — someone’s either getting additional responsibilities and being paid properly, or they’re being paid hourly, and managers are doing a better job of managing time” to avoid overtime, Young added.