The U.S. Department of Labor (DOL) has proposed a change to federal overtime pay requirements, raising the exempt status of overtime pay to $50,440 in 2016. (Wall Street Journal)
Under current rules, an employee is exempt from overtime if he earns a salary of more than $455 a week/$23,600 annually, and his “primary duties” are defined by the DOL as managerial, professional or administrative.
The DOL’s new proposal more than doubles the threshold to $970 a week/$50,440 annually. So any employee at your company who makes less than $970 a week would be classified as an hourly employee, and would be paid overtime if they work more than 40 hours a week.
If your employees work enough overtime, their paycheck could end up being well over the amount they were previously making as a salaried employee, meaning more money used for your company’s payroll.
"We’ve heard loudly and clearly from members that the retail and landscape sectors will be seriously and directly impacted. For growers, the picture is a little murkier," says Craig Regelbrugge, Senior Vice President-Industry Advocacy and Research at AmericanHort. "Most growers are exempt from paying overtime under the Fair Labor Standards Act, so long as they are careful not to engage in activities that jeopardize the exemption. The ag exemption is statutory, and supersedes what the Administration is attempting here. And, our legal team argues that the overtime exemption extends to office staff, again so long as the business is not engaged in activities that jeopardize the exemption."
A common cause of trouble is when an operation brings in product from elsewhere to supplement its own production, Regelbrugge explains.
"It's not a problem to buy liners or young plants from elsewhere, but if material is being brought in and essentially sold without substantial change, it can be a problem," he adds.
The DOL intends to make these changes effective in 60 days.
"Job No. 1 for us is to seek more time for analysis and comment. A 60-day comment period for such a sweeping and far-reaching rule is laughable," he says. "So we are circulating a comment letter for our partner associations to send to DOL seeking another 60 days to properly consider impacts of the rule."