The U.S. Department of Labor (DOL) has proposed a change to federal overtime pay requirements, raising the exempt status of overtime pay to $50,440 in 2016. (Wall Street Journal)
Under current rules, an employee is exempt from overtime if he earns a salary of more than $455 a week/$23,600 annually, and his “primary duties” are defined by the DOL as managerial, professional or administrative.
The DOL’s new proposal more than doubles the threshold to $970 a week/$50,440 annually. So any employee at your company who makes less than $970 a week would be classified as an hourly employee, and would be paid overtime if they work more than 40 hours a week.
According to data collected from Lawn & Landscape’s most recent benchmarking report, the average landscape company pays its salaried employees (account managers, supervisors, crew foremen/leaders and designers) all under $50,000 a year. Under the DOL’s proposal, all of these positions would switch over to hourly jobs.
If your employees work enough overtime, their paycheck could end up being well over the amount they were previously making as a salaried employee, meaning more money used for your company’s payroll.
“Everybody is going to have to look at their workforce, how they’re being paid and how they’re being classified, and make decisions of whether they’re going to change how they do that to meet the requirements,” Tom Delaney, director of government affairs for the National Association of Landscape Professionals.
Job classification. For example, if your crew leader does the same work as a crew, DOL’s proposal says he can no longer be classified as a supervisor. He has to stick to either the supervisory responsibilities and not do the same work as the rest of the crew, or else not be classified as a supervisor.
“If they switch supervisors over to hourly pay, then they’re not going to get some of the other compensation they used to get, like a vehicle or computer or some kind of other type of things that they might have been getting from being a supervisor,” Delaney says.
Hourly pay could hurt your supervisors in terms of weather as well. If the weather’s bad and your crew gets sent home, the supervisors won’t get paid.
What you can do. The DOL intends to make these changes effective in 60 days. Because of the affect these changes will have on the industry, NALPs is demanding that the administration add an additional 60 days to give people time to research and comment.
NALP is urging members of the industry to write to their legislator and ask the DOL to extend the deadline for comments on the new proposal. It’s important for individual companies to show the DOL how this will affect them.
“We can talk and lobby to legislators as an industry how things affect us, but it’s the people who have to live the requirements and the stories that affect each personal company that makes a difference to legislators,” Delaney says.