Chris Vest, CAE
Chris Vest, CAE, is director of public policy at ASAE.
A rule change proposed by the Department of Labor would greatly expand the pool of American workers eligible for overtime pay.
Associations are among the many businesses seeking to gauge how new overtime rules proposed by the Obama administration will affect their employees' work schedules and their own bottom line.
The proposed rule change, issued by the Department of Labor (DOL), would raise the minimum salary at which employees can be considered exempt from overtime pay to $50,440 a year, more than double the current threshold. In addition, the minimum salary would automatically increase each year to match the 40th percentile of the average salary earned by full-time employees in the United States.
ASAE has heard from many associations concerned that some of their exempt employees will now be eligible for overtime under the new salary threshold or will have to be switched to hourly pay. Many association employees currently qualify as exempt from overtime eligibility because their annual salary is greater than $23,660 and because their primary duties fall under the executive, administrative, and professional (EAP) exemption included in the Fair Labor Standards Act of 1938.
While the rule won't likely be finalized for months, the change could force companies to keep closer tabs on hours worked by overtime-eligible employees, including how to handle work done outside the office, such as responding to emails in the evening or working at a conference over a weekend.
DOL is also seeking comments on whether the duties test is working as intended or needs to be modified. For example, the agency asks whether employees should be required to spend a minimum amount of time performing work that is their primary duty in order to qualify for exemption. As many salaried association employees perform all sorts of duties in the course of their work, it's possible that a change to this language could turn many exempt positions into overtime-eligible positions.
With the comment period closed as of September 4, ASAE and other associations are waiting to see what, if any, changes the Labor Department decides to make before finalizing the new rules.
[This article was originally published in the Associations Now print edition, titled "Who's On the Clock?"]