Today ASAE submitted comments to the Department of Labor Notice of Proposed Rulemaking on the Obama administration’s pending regulations to raise the salary threshold at which eligible workers qualify for overtime pay. ASAE’s comments can be found here. We strongly encourage any associations that may be impacted to review our comments to use them as a model or focus on a specific area of concern to your organization. Comments can be submitted electronically here on or before Sept. 4, 2015.
ASAE has heard from association leaders around the country who are concerned that some of their exempt employees will now be eligible for overtime under the new salary threshold or will have to be switched to hourly pay. Many association employees currently qualify as exempt from overtime eligibility because their annual salary is greater than $23,660 and because their primary duties fall under the executive, administrative and professional (EAP) exemption included in the original Fair Labor Standards Act of 1938. While the rule won’t likely be finalized for months, the change is forcing companies to consider keeping closer tabs on hours worked by overtime-eligible employees, including how to handle work done out-of-office, such as responding to emails in the evening or working at a conference over a weekend.
ASAE’s comments can be summarized into five main areas of concern:
- ASAE believes the Department of Labor’s proposal of a minimum annual salary level for exempt employees of $50,440, with automatic annual renewals, sets a one-size-fits-all measuring stick for middle-class incomes. The minimum salary level for exemption should instead be keyed to government data on regional cost-of-living differences.
• The minimum salary level should be set lower than the proposed level of the 40th percentile of average full-time employee salaries, either across-the-board or for the nonprofit sector. Under the current over-inclusive proposal, too many senior-level exempt employees would be reclassified as overtime-eligible because of their salary level, particularly in nonprofit organizations.
• The proposal would adversely affect nonprofit organizations and other employers with limited revenues and would harm many affected employees. To contain payroll costs from increased overtime obligations, these employers would have to either lay off employees or exclude reclassified employees from telework and career growth opportunities outside of core business hours. Under both scenarios, the remaining exempt employees would bear the brunt of increased workloads.
• ASAE also believes that no changes to the duties test regulations should be made without providing notice of the specific proposed changes and another opportunity for public comment.
• If the Department of Labor considers changes to the duties test, it should (i) add clarity to classification determinations by incorporating new examples of exempt occupations, including examples specifically addressing common job roles in membership organizations, and (ii) avoid adopting a rigid minimum time percentage test for assessing the “primary duty” of a position.
Again, ASAE strongly urges you to review the rules and background information at the Power of A website here and submit comments to the DOL if you believe they will impact your organization. If you have any questions please contact the Public Policy Department at email@example.com.