The Society for Human Resource Management has commented on the United States Department of Labor‘s proposed changes to the current overtime rules.
Spoiler alert: SHRM likes ’em.
Salary level.
In case you need your recollection refreshed, back in March, the DOL indicated that it would raise the salary threshold to determine who would be eligible to collect overtime for working more than 40 hours in a workweek. Right now, anyone who earns less than $455 per week ($23,660 per year) in salary is overtime eligible. The DOL plans to raise that to $679 per week (equivalent to $35,308 per year).
The DOL arrived at this figure by calculating the standard salary level at approximately the 20th percentile of earnings for full-time salaried workers in the lowest-wage Census region (the South), and/or in the retail sector.
SHRM agrees with this approach.
Updates to the salary threshold.
SHRM wants the DOL to regularly update the salary threshold after providing notice to the public and the opportunity to comment.
The DOL does not plan to adjust the threshold automatically.
Don’t vary by region.
SHRM wants the DOL to refrain from varying salary thresholds based on geography or other factors. The logic here is that uniformity is easier to manage and administer for multi-state employers.
Highly-compensated Employee (HCE) Exemption.
The DOL is poised to have $147,414 be the new threshold for the HCE exemption. Presently, the salary level is $100,000.
SHRM thinks $147,414 is too high. Therefore, SHRM has requested that the DOL “reconsider the proposed increase to the minimum salary required for application of the HCE exemption and either leave it at the current level or adjust with consideration of a more appropriate gap between the standard and HCE thresholds.”
Bonuses and commissions.
Under the proposed DOL rule, employers can count nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10 percent of the standard salary level, provided such bonuses are paid annually or more frequently.
SHRM is cool with this too but recommends having this apply to all bonuses regardless of amount.
Duties Test.
The DOL doesn’t plan to mess with the duties test, and SHRM is a-ok with that.
Regular rate of pay.
Earlier this year, the DOL announced that it would clarify how companies calculate overtime for employees. SHRM proposes that the DOL should address this as part of the overtime rulemaking.
Ample time to implement.
SHRM has requested that the DOL provide employers at least 120 days to implement whatever becomes the final rule.
Do you want to comment on the proposed DOL overtime rules?
Well, don’t email me. I don’t make the law. And if you didn’t submit your comments to the DOL by May 21, well, you’re too late.
But if you fancy reading 116,298 comments, be my guest, nerd.