Washington — The National Lumber and Building Material Dealers Association (NLBMDA) is disappointed with a final rule announced today by the U.S. Department of Labor (DOL) that will dramatically increase the number of employees eligible for overtime pay.
As part of the final rule, the salary level under which employees qualify for overtime pay will increase from $455 per week ($23,360 annually) to an estimated $913 per week ($47,476 annually). The rule is effective December 1, 2016 and the salary threshold will update automatically every three years. The final rule does not make any changes to the duties test for executive, administrative and professional employees. DOL’s one-size-fits-all approach will create greater confusion for employers and employees alike in small business workplaces that require flexibility, initiative, and innovation.
On April 4, NLBMDA met with the White House’s Office of Management Budget (OMB) Office of Information of Regulatory Affairs (OIRA) stating its opposition to the rule. NLBMDA noted the new rule failed to consider regional differences for overtime pay, and that DOL’s analysis lacked proper attention to the impact on small business and devoid of any empirical data linking earnings data to the realities of local economies, markets, and sectors. Previously, NLBMDA submitted written comments to DOL in September 2015 opposing the rule.
“DOL’s final overtime rule may actually hurt the people it is designed to help,” said NLBMDA Chairman Scott Yates, who serves as president and general manager of Denver Lumber Company in Denver, Colorado. “Lumber dealers fairly compensate their employees but the new rule could have unintended consequences causing a reduction in flexibility and advancement opportunities for employees.”
Legislation was introduced in March in both the House of Representatives and Senate that would delay the Overtime Rule. The Protecting Workplace Advancement and Opportunity Act (H.R. 4773, S. 2707) would halt the changes to overtime pay eligibility criteria and require DOL to conduct a comprehensive economic analysis on the impact of mandatory overtime expansion to small businesses, nonprofits, and public employers.
NLBMDA will continue to seek a legislative remedy limiting or repealing the changes to the Overtime Rule. “We are hopeful congressional action can help bring a rational approach to addressing minimum salary thresholds for overtime pay,” said Jonathan Paine, NLBMDA President and CEO. “Unfortunately, the DOL’s simplistic approach of imposing such a large increase for determining overtime pay eligibility disrupts a bright-line test that employers have long-used to fairly compensate hourly workers and at the same time provide opportunities for worker initiative and responsibilities at the managerial levels.”
Lumber dealers should continue to take action on the DOL Overtime Rule by going to NLBMDA’s Legislative Action Center and sending a letter to their Representative and Senators asking for support and passage of the Protecting Workplace Advancement and Opportunity Act.