U.S. Department of Labor -- Changes to Overtime Rule26-May-2016
******UPDATE***** Wednesday, November 23rd, 2016******
A Federal judge in Texas blocked an Obama administration rule to extend mandatory overtime pay to more than 4 million workers from taking effect. The overtime changes were set to take effect on December 1st. Under the rule, workers would have been eligible for overtime pay as long as they made less than $47,500. We will be sure to convey more information as soon as it is available.
**** Previous Update******
A few months ago, FACCM sent out a survey and an email to gather information to provide comment on the U.S. Department of Labor's (DOL) proposed changes to the overtime rule. Most recently, the Department of Labor published their final changes. As a reminder of our efforts, FACCM joined and collaborated with an alliance of early learning providers and small businesses across the Southeastern United States to help articulate and oppose some of the changes that would negatively affect small business owners, like yourselves. We are pleased to provide you with a summary below, and as always, FACCM is your voice for early learning.
To provide some background, last year, the DOL proposed, among other things, increasing the minimum salary level for exempt “white collar” employees from approximately $23,660 per year to $50,440 per year. We teamed with several other southeastern child care associations to retain Fisher & Phillips LLP to draft comments objecting to the DOL’s proposed rule changes.
It appears that the DOL considered our objections and modified the proposed rules accordingly, even if they did not make as significant of modifications as we had hoped. Specifically, the new rules contain the following key changes: The minimum salary threshold for exempt “white collar” employees will now be $913 per week, which
Apparently, DOL modified its proposed level in response to our request that it take into account the average earnings of salaried employees in low-income regions such as the South. The DOL will automatically update the minimum salary level every three years (meaning that the minimum salary level will likely increase every three years), beginning on January 1, 2020. The DOL will announce the amount it is increasing the salary level 150 days in advance of the increase. Employers will be able to satisfy up to 10% of the minimum salary level through nondiscretionary bonuses and other incentive payments, including commissions, provided that the payments are made at least quarterly.
Now that we’ve discussed what has changed, here is what remains the same: The new rules do not go into effect until December 1, 2016. As such, for the next 6+ months, no changes are necessary. The new rule changes do not impact the teacher exemption. A bona fide teacher whose primary duty is teaching, tutoring, instructing or lecturing in the activity of imparting knowledge, and who is employed and engaged in this activity as a teacher in an educational establishment, will remain exempt from overtime regardless of how much he/she paid even after the new rules go into effect. Obviously, some changes to your current pay levels will likely be necessary. However, there is time to figure out how to change your employees’ compensation in a manner that works for your center. We encourage you to work with a dedicated employment attorney or human resources professional to make sure that you are responding appropriately to the rule changes and are taking advantage of any other options that may be available to your center.
Please consider supporting our future efforts, not only at the federal level but at the state level. We head to Tallahassee in the fall and are meeting with Legislators throughout the summer to address our industry's goals. Consider a contribution to our PC, Florida's Voice for Early Learning by emailing firstname.lastname@example.org for more information.
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