OT proposal improved, but DOL should not create burdens for CUs

May 22, 2019

The Department of Labor’s (DOL) current proposed overtime regulation under the Fair Labor Standards Act (FLSA) is an improvement over the 2016 overtime rule, but CUNA urges DOL to avoid creating excessive costs and compliance burdens on credit unions.

“The proposal attempts to strike a balance between ensuring the salary level test is consistent with present day practice while also avoiding a sudden jolt to the resources of small employers,” the letter reads. “CUNA agrees the proposal provides a more sensible balance of those two goals than the 2016 Overtime Rule, which we expressed serious concern about at the time."

In 2016 DOL issued a final rule increasing the salary level for overtime exemption to $47,476 annually (up from $23,660 annually). However a U.S. District Court for the Eastern District of Texas blocked the rule’s implementation in November 2016.

The DOL’s current proposal would increase the minimum salary for the “white collar” overtime exemption to $35,308 annually and allow employers to count nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10 percent of the salary level test.

“The Department’s proposed increase in the salary level threshold for an employee to qualify for the “white collar” exemption is modest compared to the 2016 Overtime Rule, but even modest increases have the potential to strain small credit unions’ finite resources.”

CUNA is concerned about the negative effect the rule will have on smaller credit unions and those in rural or underserved areas, as well as with a “one-size-fits-all” national standard for salaries.

“It is logical that credit unions and other businesses located in non-metropolitan areas may deserve special consideration in the Department’s overtime regulations. We encourage the Department to further evaluate and consider whether a uniform federal salary standard applicable to many diverse regions is appropriate in this context.”