Regulatory Update

Comment Period Closes on Proposed Overtime Changes

Sep 11, 2015
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On September 4, 2015, SHRM submitted comments to the Department of Labor (DOL) on the proposed changes to the 541 overtime regulations. Despite the request of SHRM and more than 600 other organizations and individuals asking for an extension of the comment period, DOL provided just 60 days for public comment.

Within that time frame, however, SHRM members were very engaged on the issue, with 50 SHRM state councils and 307 SHRM chapters as well as SHRM’s strategic affiliate, the Council for Global Immigration, signing on to SHRM’s comment letter. In addition, through a special portal created by SHRM, individual SHRM members sent over 800 letters to DOL and close to 3,000 letters to Capitol Hill expressing their concerns with the proposed regulation.

Below is a summary of the key concerns expressed in SHRM’s comment letter:

Salary Threshold

  • The proposed salary threshold ($970/week, or $50,440/year, in 2016) is an increase of more than 100% of the current threshold and is so substantial that it will have a significant impact on nearly every workplace.
  • DOL improperly based the new salary threshold on the 40th percentile of earnings for full-time salaried employees, a complete departure from the methodology used since the law was enacted.
  • The new salary threshold will have more-pronounced negative effects on employers based in certain regions of the country with lower costs of living and lower levels of compensation, as well as in the nonprofit sector. SHRM members working at nonprofits have indicated that they will need to cut services in response to the new salary threshold.

Potential Changes to the Duties Test

  • DOL’s proposed regulation does not propose specific changes to the duties test but asks for input on whether the duties test should be updated. SHRM points out that if DOL decides to make changes to the duties test, SHRM believe that the agency is legally required to publish those changes for public notice and comment.

SHRM also chaired the Partnership to Protect Workplace Opportunity, the lead voice of the employer community responding to the regulation. SHRM also chaired the Partnership to Protect Workplace Opportunity, the lead voice of the employer community responding to the regulation. The partnership’s comment letter was signed by 133 national organizations.

According to the comment portal, DOL received more than 245,000 comment letters. The agency must review these comments before publishing a final regulation, likely in 2016.

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