Proposed change in federal overtime regulations enters homestretch

Updated Mar 17, 2016

Time appears to be running out on the National Association of Landscape Professionals and numerous other organizations representing small and midsize businesses that hope to modify, if not quash, a proposed change in federal regulations on overtime.

The proposed rule was submitted this week to the Office of Information and Regulatory Affairs (OIRA), which is part of the Obama administration’s Office of Management and Budget. Generally, OIRA has 90 days to review a draft regulation, although its approval could come much sooner.

NALP-logoA Labor Department spokesman said Wednesday afternoon that once the proposed rule is approved, the department will publish the final rule in the Federal Register “with a specific date upon which the rule becomes effective and enforceable.”

The proposed change would increase dramatically the number of U.S. workers – now salaried employees – who are subject to federal overtime rules.

Under current regulations, an employee must be paid at least $455 per week, or $23,660 per year, in order to come within the standard exemption from overtime rules. (Overtime rules require employers to pay non-exempt employees 1.5 times their normal hourly wage for each hour worked above 40 in a single week.) The current rule’s pay level was set almost 12 years ago.

In addition to the pay-level requirements, an exempt employee’s job duties must primarily involve executive, administrative or professional duties.

Under the Labor Department’s rule change, the minimum salary necessary to meet the exemption from overtime will increase by more than 100 percent, to $970 per week, or $50,440 a year.

The National Association of Landscape Professionals is part of a consortium of businesses fighting the change. The group, called Partnership to Protect Workplace Opportunity (PPWO), acknowledges that some change in the annual salary threshold was warranted, but notes that the proposed rule’s 113-percent increase in the minimum annual pay required to qualify as a salaried employee will be devastating for many U.S. businesses – and ultimately, their employees.

The full PPWO plans to meet in Washington on Friday to discuss how best to lobby against the rule now that it has entered the last step before final approval.

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