Proposed Overtime Ruling

Posted by on August 31, 2015

Amy 2A critical part of economic development in a region is government relations. While larger companies may have their own department or lobbyist, small to medium size companies may not have that infrastructure to rely on, that is where the LSCP comes in. We can be the eyes and ears for your company on the state and federal level.

By staying in tune to the government relations page of our website you will be able to see the legislation we are following, any stands we take as an organization and the opportunities you have to weigh in on the topic. You can also see what issues we supported or opposed last year and the outcome. We send email updates and action alerts as issues arise as well.

At the LSCP, we have a process we follow internally that is strategic in nature. We start with the creation of a legislative agenda designed by our government relations committee and approved by the board of directors. At its most basic level it provides with consistent guiding principles that we use when vetting legislation. These principles are:

  • Support a regulatory climate that will help the region attract quality business, industry and jobs to the area and to retain/expand existing business and industry while balancing environmental stewardship
  • Support development and maintenance of infrastructure systems that encourage economic development
  • Advocate for changes necessary in P-20 education to prepare all students for careers of the future and to provide a skilled workforce to support the region’s employers.

From there the legislative agenda goes into more detail in the areas of regulatory climate, infrastructure and workforce.

Today we are watching a variety of legislation surrounding taxes, energy and transportation funding at the state level. All of these have the potential to impact how you do business and we believe it is important to follow them and create an awareness of what’s being proposed. We expect when the legislature gets back to Lansing in the Fall, road funding and the creation of a state energy policy will be priorities.

At the federal level we have a concern about the recent United States Department of Labor (USDOL) proposed overtime ruling. This proposal in its current form would:

  • set the standard salary level at the 40th percentile of weekly earnings for full-time salaried workers ($921 per week, or $47,892 annually). This is an increase of about 102%, $455 to $921;
  • increase the total amount of compensation requirement needed to exempt highly compensated employees (HCE’s) to the annualized value of the 90th percentile of weekly earnings of full-time salaried workers ($122,148 annually);
  • and establish a mechanism for automatically updating the salary and compensation levels going forward to ensure that they will continue to provide useful and effective test for exemption.

In the first year, the USDOL estimates that 4.6 million workers exempt under the current regulations, who earn at least the current weekly salary level of $455 but less than the proposed salary level of $921, would, without some intervening action by their employers, become newly entitled to overtime protection under the FLSA.

Consider how this may affect your business? Do you currently pay exempt employees less than $47,892 annually? If you answered yes, then you will be required to up their salary to that level or begin paying them overtime wages after 40 hours worked. The current proposal does not take into account any differences in average wages between urban and rural communities.

We strongly encourage you to submit written comments on the proposed rule on or before September 4th. Click here to do so.

CEO, Amy Clickner, writes a bi-weekly column for the Mining Journal.

 

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