Washington, D.C.—A final rule regarding the overtime regulation issued by the Department of Labor (DOL) has addressed and incorporated concerns expressed throughout the rulemaking process by the American Bakers Association (ABA). On September 24, the Department of Labor (DOL) issued its final rule increasing the earnings thresholds necessary to exempt executive, administrative, or professional employees from the Fair Labor Standards Act (FLSA) minimum wage and overtime pay requirements, typically referred to as “time and a half.”
“ABA opposed the Obama Administration’s 2015 proposed rule because an increase so large would have had a sudden financial burden on ABA Members and their suppliers,” said Lee Sanders, SVP of Government Relations and Public Affairs at ABA. “ABA joined with both the US Chamber of Commerce and National Association of Manufacturers in response comments arguing the broader business community, which includes many small businesses, would have been drastically impacted.”
DOL has been working to update the regulation since 2015 when the Obama Administration proposed increasing the minimum salary level for exemption to $913 per week ($47,476 annualized). The Trump Administration has been working on revisions since November of 2017, when a Texas Judge enjoined the Obama-era rule.
“The final rule abandons an annual adjustment to the minimum salary threshold,” adds Sanders. “Throughout the rulemaking process, ABA expressed concern that the 2015 rule included an annual adjustment to the minimum salary threshold by tying it to either the Consumer Price Index (CPI) or the 40th percentile of weekly earnings of full-time salaried employees.”
The final rule, effective on January 1, 2020, will:
- Raise the “standard salary level” from the currently enforced level of $455 to $684 per week (equivalent to $35,568 per year for a full-year worker);
- Raise the total annual compensation level for “highly compensated employees (HCE)” from the currently-enforced level of $100,000 to $107,432 per year;
- Allow employers to use non-discretionary bonuses and incentive payments (including commissions) that are paid at least annually to satisfy up to 10 percent of the standard salary level, in recognition of evolving pay practices;
- Abandon an annual adjustment to the minimum salary threshold.
-American Bakers Association-
The American Bakers Association (ABA) is the Washington D.C.-based voice of the wholesale baking industry. Since 1897, ABA has worked to increase protection from costly government overreach, build the talent pool of skilled workers with specialized training programs, and forge industry alignment by establishing a more receptive environment to grow the baking industry. ABA advocates on behalf of more than 1,000 baking facilities and baking company suppliers. ABA members produce bread, rolls, cookies, crackers, bagels, sweet goods, tortillas, and many other wholesome, nutritious, baked products feeding America’s families. The baking industry generates more than $153 billion in economic activity annually and employs more than 799,500 highly skilled people.