On March 13, 2014, President Obama signed a presidential memorandum directing the Department of Labor to modernize and streamline existing overtime regulations. The memorandum directs the DOL to propose specific regulations defining which white collar workers are protected by the Fair Labor Standards Act governing “white collar” exemption from overtime pay for executive, administrative and professional employees.
As a result, the DOL issued a proposed rule in July 2015 that would extend “exempt” overtime pay regulations from $23,660 per year to $50,440 per year, a salary threshold that would be updated every year in the Federal Register. This means that more state and local government employees who are currently classified as exempt could be eligible for overtime pay, extending indefinitely.
The DOL is encouraging interested parties to submit comments on the proposed rule, and the GFOA Federal Liaison Center is asking is asking GFOA members to consider the impact of this rule on your localities. Specifically:
- Does this increase in exempt employee salary pose a substantial concern for your locality?
- Are there specific sections of the rule (such as the “duties test”) that are outdated or should be addressed?
- Would you be able to estimate the financial burden for your locality?
If you answered “yes” to any of the questions above, please contact Emily Brock, senior policy advisor, Federal Liaison Center. Comments are due soon, but it is not uncommon for an extension of this session, and GFOA is interested in communicating the rule’s true fiscal impact.