Money & Business

ASAE Opposes "One-Size-Fits-All" Overtime Rule

By / Aug 10, 2015 (iStock/Thinkstock)

In comments to the  Department of Labor, ASAE is urging the Obama administration to reconsider its proposed changes to regulations that define who is eligible for overtime pay.

Voicing concerns raised by associations nationwide, ASAE last week submitted comments [PDF] to the Department of Labor (DOL) on the Obama administration’s proposal to raise the salary threshold at which eligible workers qualify for overtime pay.

Saying it “supports the principle” in the proposal that the Fair Labor Standards Act (FLSA) regulations “need to be modernized and streamlined,” ASAE said it had heard from numerous members “expressing serious concerns about the significant impact of the [proposed] changes.”

“ASAE has prepared comments well before the September 4 deadline in order to give our members’ associations time to fully understand how the administration’s proposed rule would impact their groups and voice their own concerns accordingly,” said Jim Clarke, CAE, senior vice president of public policy. “The rule as drafted could have significant implications for many organizations, particularly smaller-staffed associations with limited resources.”

ASAE’s comments focus on several concerns, including the proposal for a “one-size-fits-all” minimum annual salary threshold, and notes ASAE’s preference to key the salary threshold to government data on regional cost-of-living differences.

Under current DOL regulations, last updated in 2004, employers are required to pay all employees time-and-a-half for any hours they work in excess of 40 hours per week if they make less than $23,660 per year, regardless of the employee’s job responsibilities. The proposed rule would more than double that salary threshold, so that any employee earning a salary of less than $50,440 per year would become eligible for overtime pay.

ASAE heard from many associations concerned that some of their exempt employees would become eligible for overtime under the new salary threshold or would have to be switched to hourly pay. Many association employees are classified as exempt from overtime eligibility because they are paid on a salary basis at an annual rate of at least $23,660 and because their primary duties meet the test for the executive, administrative, or professional exemptions under the FLSA.

While the rule won’t likely be finalized for months, the change is forcing organizations 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.

The proposed new rules also would automatically increase the minimum salary each year to match the 40th percentile of the average salary earned by full-time employees in the United States. In its comments, ASAE said the minimum salary level should be set lower, either across the board or for the nonprofit sector. Under the current proposal, too many senior-level exempt employees would be reclassified as overtime-eligible because of their salary level, particularly in nonprofit organizations, ASAE said.

Finally, ASAE urged DOL not to make any changes to the duties test in the regulations without providing notice of the specific proposed changes and another opportunity for public comment.

Chris Vest, CAE

Chris Vest, CAE is director of public policy at ASAE. More »

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