ASAE Submits Comments on DOL Overtime Rule Revision Proposal
As the Department of Labor considers a new overtime revision proposal, ASAE says a high minimum salary level would negatively affect nonprofits.
Following the Department of Labor reopening discussion on the overtime rule in June, ASAE submitted comments and a proposed minimum salary level last week to DOL as it prepares to revise eligibility regulations.
ASAE’s comments focus on how potential changes to overtime eligibility would affect associations and other nonprofit employers. As it did with the Obama-era rule, ASAE emphasized that it’s not against increasing the overtime salary threshold, but that creating a “one-size-fits-all” salary threshold for overtime eligibility across the country—inconsiderate of cost-of-living differences—would not be workable for many employers.
“Increasing a minimum salary level at a rate higher than inflation would have a significant adverse effect on many nonprofit organizations, particularly nonprofits located in rural areas and small towns outside of major metropolitan areas and in certain lower-wage regions of the country,” the comments read. “The 2016 Final Rule’s uniform minimum salary level of $47,476 disregards the very real regional differences in the level of income needed to achieve a middle-class standard of living.”
Based on the federal government’s inflation calculator, ASAE has suggested that an inflation-adjusted minimum salary level of $30,830 would be an appropriate threshold for overtime eligibility moving forward.
Earlier this year, Labor Secretary Alexander Acosta said the salary threshold proposed by the department under the Obama administration was excessive and too burdensome on many employers. The Obama-era rule would have doubled the salary threshold to $47,476, under which virtually all workers are guaranteed overtime pay if they work more than 40 hours per week. Acosta has suggested, however, that the current minimum salary level of $23,660 should be updated to about $33,000—adjusted for inflation—and the DOL’s request for comments is a first step in the agency’s plan to revise the regulations. The overtime rule was last adjusted in 2004.
DOL has asked for input on whether the current threshold of $23,660 should be updated for inflation, and whether there should be multiple standard salary thresholds based on employer size, region of the country, and other factors. The agency also asked employers to explain how they prepared for the rule to take effect and whether there are unique challenges for small businesses that should be taken into account.
The overtime rule has been identified as a major area of concern for nonprofit employers, and ASAE says the higher minimum salary level “disproportionately adversely affected nonprofit employers.” For this reason, ASAE is sharing its comments with other associations, as well as model comments [DOC] that others can use or adapt if they want to provide their own feedback to DOL. Comments are due by September 25 and can be filed electronically through regulations.gov.