Courtesy of the National Grocers Association
The Department of Labor (DOL) finalized and released the pending rule on overtime pay for salaried workers. The rule addresses the “white collar” exemption for executive, professional, and outside sales workers under the Fair Labor Standards Act. The new rule raises the exempt salary threshold from the previous $23,660 ($455 per week) to $47,476 ($913 per week). The 100% increase will also be coupled by an automatic increase which will be tied to changes in the 40th percentile in full-time salaried wages in the lowest-wage region of the United States (currently the southeast). The automatic increases will take place every three years, not on an annual basis as previously expected. There were no changes made to the duties test.
NGA has worked tirelessly to combat the changes made to the overtime rule since the publication of the proposed rule in July of 2015. NGA submitted extensive comments on behalf of NGA members (click HERE to view NGA’s comments) and has been actively lobbying towards a legislative solution (H.R. 4773 and S. 2707, the Protecting Workplace Advancement and Opportunity Act) that would prevent the rule from going into effect. NGA also presented the concerns of the independent supermarket industry to the Office of Management and Budget Office of Information and Regulatory Affairs (OMB, OIRA) during the required rule review process. NGA has consistently advocated against the rule on the grounds that it would have significant negative effects on independent grocers, employees, and the communities they serve.
The rule is set to go into effect on December 1, 2016. This is a substantially longer period than the 60 day implementation period that had been rumored, though still far short of the desired 12-18 month implementation timetable NGA laid out to OMB. In the interim, NGA will continue to work with the Partnership to Protect Workplace Opportunity and other allied trade associations to push for H.R. 4773 and S. 2707 to be taken up for consideration in their respective chambers. It should be noted that the use of the Congressional Review Act (CRA) has been discussed in relation to the overtime rule. The CRA is a legislative mechanism that allows the Congress to pass a joint resolution of disapproval that negates the rule in question. However, a CRA is unlikely to gain the signature of the President and it is unlikely that either chamber has the votes to overcome a veto, making a legislative fix the best option for preventing this rule from going into effect.
Though NGA maintains that the 100% increase of the salary threshold will place a significant burden on the independent supermarket industry, the changes made to the final rule fully reflect the arguments that NGA made in our comments to DOL and OMB. NGA strongly advocated for: no changes to be made to the duties test, a longer implementation period, no automatic annual updates, and a significantly lower salary threshold based on geographic differences in salaried wages.