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May 16, 2016
Politics & Co

New overtime rule could quadruple number of eligible Maine workers

For more information:

1. U.S. Department of Labor Wage and Hour Division notice of proposed rulemaking on overtime regulations:

http://1.usa.gov/1W06oWM

2. "Overdue Overtime: The Voices of Workers and Working Families on the Need for New Overtime Rules," report compiled by Sen. Elizabeth Warren: http://buff.ly/23VY9dL

3. "King Urges Administration to Consider Impact of Overtime Regulations on Maine Businesses": http://1.usa.gov/1W067mV

4. "Alert: Update on Publication of the New FLSA Overtime Regulations" by Preti Flaherty attorney Matthew LaMourie:

http://bit.ly/1ThV3vE

A proposed change to the nation's overtime eligibility regulations could quadruple the number of workers in Maine who would be covered by the new salary threshold — rising from 16,000 to 64,000 workers. More than half of those benefiting in Maine — 25,000, or 52% of the projected increase in eligibility — are women, while 22,000 (46%) are men.

Those findings are included in a May 2 report issued by U.S. Sen. Elizabeth Warren, D-Mass., highlighting public comments from workers and their families in all 50 states in support of the proposed new federal overtime rule, which is scheduled to be finalized very soon. Nationwide, Warren stated, the rule would benefit more than 13.5 million workers by making them newly eligible for overtime pay or strengthening their protections against being misclassified by employers.

The U.S Department of Labor has not updated the Fair Labor Standards Act's overtime threshold since 2004, when it was adjusted from $250 per week to $455 per week under President George W. Bush. Under the proposed rule, the U.S. Department of Labor would increase the salary threshold under which non-exempt employees would be required to receive overtime pay of 1.5 times their regular hour rate whenever they work more than 40 hours per week.

Currently, that's $23,660 (or $455 per week). The new rule would raise it to $50,440 (or $970 per week) — although recent press reports suggest DOL might raise it only to $47,000 (or $903.85 per week).

In a May 2 letter to Shaun Donovan, director of the Office of Management and Budget, Warren encouraged him "to pay particular attention" to the more than 270,000 public comments made since the proposed rule was issued on June 30, 2015. "Too often, the voices of workers are buried beneath a flood of comments from lobbyists and lawyers," she wrote. "But the record before your agency demonstrates that American workers are demanding updated overtime rules. Updated overtime rules will give millions of working families a fighting chance to build more financial security for themselves. It's time for us all to listen to those voices."

The DOL sent the final rules to the White House's OMB in mid-March. Warren is among the Democratic lawmakers urging OMB to approve the rules quickly, while Republicans in Congress have introduced legislation to block them.

Sen. King outlines his concerns

"While I support the overall aim of increasing wages for Americans, I have serious concerns about the proposed overtime rule's impact in Maine," U.S. Sen. Angus King, I-Maine, wrote in an April 12 letter to OMB. Among King's concerns, as spelled out in his letter:

  • Salary threshold: "[T]he proposed salary threshold runs the risk of being too much, too soon for many Maine employers." King suggested a "more prudent course of action" would be to phase in the new salary threshold over three years.
  • Automatic increase: The draft rule calls for a change in the usual practice of periodically updating the overtime threshold to an automatic adjustment, "without an accommodation for regional trends."
  • Implementation timeline: The draft rule calls for businesses to be compliant within six months of the final rule being published. King suggests a one-year deadline would be better to give businesses time "to understand their compliance obligations and to adjust their budgets accordingly."

In an April 15 alert posted on the Preti Flaherty website, Matthew LaMourie, an attorney with the firm's employment law group, recommends that "over the next 90 days, all employers ought to begin modeling the potential payroll costs and effects associated with the new standards."

Read more

Proposed federal overtime rule goes to the White House for review

LePage joins coalition lawsuit against overtime rules

New OT rule praised, others say it goes too fast, too far

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