ISSA Details Proposed Overtime RulesMarch 14, 2019
On March 7, after months of delays, U.S. Department of Labor (DOL) released a new Notice of Proposed Rulemaking (NRPM). Their rule will formally rescind the Obama rule, which is important because it will protect employers against potential retroactive enforcement of the rule.
Since 2014, when President Barack Obama first directed the DOL “to modernize and streamline the existing overtime regulations,” ISSA has been active in pushing for more reasonable overtime rules than proposed. In our 2015 comments to DOL, ISSA pointed out these regulations would cost our members, “US$100,000 to well over $750,000 annually depending on the size of the company and the number of employees.”
ISSA has taken many actions on behalf of our members including submitting formal comments and being an active member of the Partnership to Protect Workplace Opportunity (PPWO), a diverse coalition of associations and industries formed to push back against the rule. The efforts of ISSA and PPWO to raise awareness of the negative impact the original rules would have had on the cleaning industry and many others has had an impact on the proposed new rules.
According to PPWO the new rule would do the following:
- Salary Threshold – Raises the threshold to $35,308 per year ($679 per week) by reverting to the methodology used in the 2004 rule that focused on the 20th percentile of full-time wage earners in the lowest income region of the company (identified as the South) as well as the retail industry.
- Future Salary Updates – Does not implement automatic updates, but the proposal seeks comment on conducting regularly scheduled rulemakings to update the salary threshold consistent with the methodology used in this proposal.
- Duties Test – Makes no changes to the duties tests.
- Highly Compensated Employees – Increases the total annual compensation requirement for highly compensated employees (HCE) from the currently-enforced level of $100,000 to $147,414 per year which is higher than the Obama DOL reg’s threshold of $134,004. The DOL maintained the methodology used by the Obama administration for this salary level which resulted in the higher threshold.
- Salary Test – Would allow nondiscretionary bonuses and incentive payments (including commissions) paid at least annually to satisfy up to 10 percent of the standard salary test requirement.
Specifically, ISSA successfully advocated for the reduction of the salary threshold (from $47,000), not implementing automatic increases to the threshold, and not changing the duties test. Each of these provisions if left unchanged would have been detrimental to our members.
ISSA will continue to review the new rules, educate our members as to those rules, actively engage the DOL on the issue on behalf of our members interests.