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CEO DATELINE – Proposed overtime rule generates little reaction among associations

March 11, 2019
By Walt Williams

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Several business groups are taking a wait-and-see approach to a Trump administration proposal to increase the number of employees eligible for overtime pay.

The U.S. Department of Labor announced March 8 a plan to raise the threshold from which salaried employees would be eligible for overtime from the current salary of less to $23,660 a year to those making less than $35,308, Reuters news service reported. Roughly 1 million more workers would be eligible for overtime pay if the new rule goes into effect.

The new proposal sets the overtime threshold much lower than that of the Obama administration, which had raised the threshold to about $47,000 before a federal judge struck it down in 2017.  Many business groups had argued the Obama threshold was too high and they now welcomed the Trump proposal, but said they would need to study the proposed rule.

“The National Restaurant Association supports the department’s common-sense approach to salary increases and the absence of a provision for automatic adjustments,” Shannon Meade, VP of public policy and legal advocacy, said in a statement to the news site Restaurant Business. “We are continuing to review the proposed rule and will provide a more in-depth analysis in the days to come.” 

Matt Haller, senior vice president of government affairs and public relations at the International Franchise Association, told the news site the proposed rule “gives business owners across the country the clarity and certainty needed to plan for their future, and many employees more money in their pocketbook.”

One group that expressed concerns about the increased threshold was ASAE, which submitted comments in 2017 that it opposed a “one-size-fits-all” approach to the issue. The group had instead suggested a minimum salary level of $30,830 for overtime eligibility. The association had not responded to the proposed rule as of Monday morning.

At least two associations are asking for an exemption for the industry they represent. The American Health Care Association and LeadingAge—which both represent assisted living providers—both told McKnight’s Long-Term Care News their members will have trouble absorbing the added costs.

“While this new policy is less drastic than prior proposals, long-term care providers should be exempt from these regulations as it may indirectly result in limiting access to care for our seniors and individuals with disabilities,” said Lilly Hummel, senior director of policy and program integrity for AHCA.