The federal overtime rule scheduled to take effect on December 1, 2016, has been given a final extension of June 30, 2017. As an employer in the construction industry, our attorneys for employers in Tampa believe it is important that you understand how the Department of Labor (DOL) overtime rule will affect you.
Aspects of the Proposed DOL Overtime Rule
The DOL overtime rule changes the salary level for executive, professional, or administrative employees. The intended goal is to guarantee overtime pay to most salaried workers earning less than $50,400 per year. This is double the current federal rate and higher than Florida’s minimum salary. Besides the guaranteed overtime pay, the overtime rule permits minimum salary requirements to be raised every three years. As we know, long projects are common in the construction industry, and the rise would make predicting overall project costs difficult for employers.
Opposition of the DOL Overtime Rule
Among the opposition for the new rule, states, business groups, organizations, and a federal court have taken legal action to block the DOL from enforcing the overtime rule. Most suits argue the DOL rule creates a compliance hurdle for employers and that more financial resources would be allocated for compliance and not higher wages.
Why Doesn’t It Make Sense?
Unfortunately, the rule failed to consider that pay scales differ from state to state. A nationwide threshold does not make sense for all employers because of the regions where employees make higher wages, due to the cost of living. The administration believes employers will merely raise salaries. Unfortunately, contractors bid on projects far in advance, operate on slim profit margins, and cannot afford to increase salaries of all affected employees. To combat the overtime rule, construction employers are more likely to reclassify impacted workers, restrict weekly hours to less than 40 hours, cap fringe benefits, eliminate some positions, or transition some positions to part-time positions.
What Action Can You Take?
Reach out to your attorney and federal legislators to support the Protecting Workplace Advancement and Opportunity Act. This act requires the DOL take a deeper examination of the impact the rule will have on employer costs and employee well being.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.