NLBMDA filed comments with the Department of Labor’s Wage and Hour Division (WHD) against a proposal to increase the salary level for the “white collar” overtime exemption. The WHD proposes to increase the level for executive, administrative, and professional employees from $455 per week to $921 per week (or from $23,660 in annual salary to $47,892). The NLBMDA comments also opposed the proposed increase for the “highly compensated employees” exemption, which WHD would increase from $100,000 annually to $122,148 annually. The current levels were set in 2004 and WHD relies on this in large part to justify such large increases. NLBMDA points out in our comments that the WHD provides no data to justify these increases.
NLBMDA said, “The proposal presumes that the current thresholds should be increased because they were last increased in 2004. The analysis provided with the proposal does nothing to verify that this presumption is valid. There is no evidence offered in the proposal to suggest that salaries have increased at the same rate over the same period of time. NLBMDA believes that the current levels in fact do represent appropriate thresholds for managerial and highly compensated employees for many sectors and geographic regions, including rural areas.”
We point out that in many sectors and geographic regions, as well as small businesses in general and businesses operating in rural areas, these proposed levels would cause many validly classified exempt employees to be reclassified as non-exempt and thus be eligible for overtime pay – creating many adverse consequences, such as forcing employers to prevent valued employees from doing their work and putting in the hours they are accustomed to. NLBMDA also opposed an inadequate call by WHD for comments on changing the “duties test” which establishes factors for determining whether an employee is acting in a managerial capacity, and we opposed a proposed automatic annual increase for the “white collar” exemption.
NLBMDA said that “the proposal offers no relevant connection between the [proposed increases for] the salaried workforce and today’s salary levels for legitimately classified EAPs and HCEs. Instead, WHD suggests that it is adequate to use the last-established salary levels as benchmarks, and further proposes automatic annual increases, again, relying solely on the proposition that salary levels will rise corresponding to a predetermined benchmark. Suggesting an automatic annual increase only further exacerbates the miscalculation made by this proposal.”