What insurance agents need to know about DOL’s proposed overtime rules
The Department of Labor (DOL) recently issued proposed overtime rules for exempt/non-exempt status, a ruling that will affect millions of workers. You need to be aware of how this ruling might impact your staff but also for how it will affect your commercial clients. Issued by the Wage and Hour Division (WHD) of DOL, the Notice of Proposed Rulemaking: Overtime proposes lifting the threshold for exempt workers from its current $23,660 ($445 a week) to $50,400 ($970 a week).
This state breakdown estimates the number of workers affected by state (PDF). For New England, the numbers of employees are:
Connecticut - 40,000
Maine - 20,000
Massachusetts - 110,000
New Hampshire - 20,000
Rhode Island - 10,000
Vermont - 10,000
The issue of exempt vs nonexempt has always been a confusing one for employers. Mike Haberman of Omega HR Solutions defines the overall terms, noting that exempt means a:
“… particular employee is exempt from being paid overtime, in other words you do NOT have to pay them anymore even when they work more than 40 hours in a week.” In contrast, for a non-exempt employee, “you MUST pay them overtime whenever they work more than that 40 hours. In some states overtime has to be paid for work of more than 8 hours in a day.”
The WHD Fact Sheet and Frequently Asked Questions go into more detail about the proposed changes. These would be good links to share with your commercial insureds.
The law could go into effect as soon as 2016, but there is a rules process first which includes a period of public commentary. Interested parties are invited to submit written comments on the proposed rule at www.regulations.gov. The comment period will close on September 4, 2015.
What should employers do now
At minimum, employers need to be aware of the proposed changes and how this might affect existing and planned staff. Here's some advice from employment law attorneys and HR experts on the matter:
Seyfarth Shaw: How Insurance Industry Employers Can Navigate the New White-Collar Overtime Rules: Turning Legal Challenge Into Business Opportunity
Risk & Insurance: Adjusting to the DOL’s Overtime Rules
BKK Employment Law Newsletter: DOL Releases Proposed Amendments to FLSA Overtime Regulations: Now is the Time to Reassess Compliance and Update Your Policies
SHRM: Overtime Proposed Rule Will Result in ‘Hard Choices’ for Some Employers