ILMA Attends SBA Overtime Rule Roundtable

SEPTEMBER 11, 2017

ILMA attended a roundtable last week hosted by the Small Business Administration’s (SBA) Office of Advocacy on the Department of Labor’s (DOL) Request for Information (RFI) on its update to the overtime rule.

Led by SBA staff, DOL heard from a variety of industry sectors on the impacts of the overtime regulations, particularly if DOL was permitted to maintain the threshold promulgated last year by the Obama Administration and recently invalidated by a federal court.

Many industry representatives conveyed similar themes to DOL, highlighting that employees who were reclassified as hourly because of the overtime rule felt disrespected and that it limited an employer’s ability to grant time off for emergencies with the promise that it would be “made up” at a later time.

Many attendees recommended that DOL adjust the threshold from $23,660 because of increased cost of living and inflation, but not to the $47,476 level finalized by the Obama Administration.

There also was a lively debate about whether it was appropriate to implement a “regional update,” where the salary threshold could be adjusted depending on economic conditions in different areas of the country.

However, there was no consensus as some groups expressed serious disagreement with the proposal, arguing it would complicate matters for companies with operations in multiple parts of the country and for those employers that have remote employees and a mobile workforce.

The Obama administration’s overtime rule was invalidated last month. U.S. District Court Judge Mazzant found, “[DOL] has exceeded its authority and gone too far with the Final Rule.” He did note that DOL does have the ability to use a salary test, but eligibility for overtime pay must be based on a combination of a worker’s duties and wages.

Robert Waterman — a compliance specialist in DOL’s wage and hour division — told attendees at the roundtable that DOL has not finalized its plans moving forward with the overtime rule.

Presumably, DOL will review the comments on the RFI received by the September 25 deadline and then issue a proposed rule that lowers the annual salary threshold to somewhere in between the current level of $23,660 and the Obama-era standard of $47,476.