ASAE Voices Support for Overtime Reform Bill
ASAE voiced support for a bill that would alleviate some of the concerns employers have with the Department of Labor’s new overtime rule.
The overtime rule, announced by the Department of Labor (DOL) in May, raises the threshold for employees who are exempt from overtime pay to $47,476 – more than double the current salary threshold of $23,660. While not opposed to an adjustment to the current overtime threshold, ASAE has expressed concern that the new rule would adversely affect many nonprofit organizations and other employers with limited revenues, and could harm many affected employees as well.
In early June, ASAE reported that DOL was likely progressing toward the expansion of overtime eligibility, and the bill (H.R. 5813)–introduced July 17 by Rep. Kurt Schrader (D-OR)—is widely viewed as a reasonable compromise that can win bipartisan support.
The proposed bill would incrementally phase in the new salary threshold over the next three years to give businesses adequate time to adjust to the new standard while also ensuring workers are fairly compensated. The bill would also eliminate a provision in the final overtime rule that allows for automatic updates to the salary threshold every three years.
“Since the DOL’s immediate phase-in date was announced, we’ve heard from business owners and their employees who are worried about implementing this increase overnight,” Schrader said. “Without sufficient time to plan for the increase, cuts and demotions will become inevitable, and workers will actually end up making less than they made before. It’s long past time we strengthen overtime pay protections for American workers in a meaningful and effective way.”
ASAE sent a letter of support [PDF] for the bill to Congressman Schrader’s office this week. In the letter, ASAE said that Schrader’s Overtime Reform and Enhancement Act “provides a much more reasonable timeline for organizations to comply with this significant payroll burden, starting with a salary threshold increase to approximately $35,984 on Dec. 1, 2016, with additional, incremental increases phased in over the next three years.”
ASAE also supports eliminating the automatic updates to the salary threshold in DOL’s overtime rule. “ASAE believes any proposed increase to the salary threshold should be subject to public notice and comment periods consistent with the rulemaking process,” ASAE said in its letter.
ASAE encourages other associations that have concerns with the overtime rule to support this timely bill. Visit Congressman Schrader’s website to see a list of other organizations supporting the bill.