Overtime proposal could have negative impacts on small, rural CUs

CUNA is concerned the Department of Labor’s overtime proposal—while it attempts to strike a balance between the 2016 and 2019 overtime rules—will have negative impacts on credit unions in rural and low-cost areas, it wrote to a House subcommittee Tuesday. The House Education and Workforce subcommittee on workforce protections conducted a hearing on the rule, which would increase the salary level test to be exempt from overtime rate of pay for working more than 40 hours in a given week.

“CUNA has concerns that the proposed rule’s increase in the salary level test threshold may disproportionately affect small and rural credit unions,” the letter reads. “The salary test has traditionally been used to easily identify employees whose salaries are so low that they do not fall within the executive, administrative, and professional (EAP) exemption to the minimum wage and overtime requirements of the FLSA. Data collected from CUNA credit union members, however, illustrates how that may not be entirely accurate with respect to smaller credit unions and the proposed salary test threshold.”

The letter also notes CUNA’s concerns about automatically updating both the salary level test and highly compensated employees (HCE) thresholds every three years to reflect the 35th percentile of weekly earnings of full-time non-hourly workers for the salary level test and the 85th percentile of weekly earnings of full-time non-hourly workers for the HCE test.

“We believe the changing economy should be revaluated in a more analytical way than merely looking at a fixed percentile of the entire country to determine a threshold. While notice and comment rulemaking takes time, it also helps to ensure that defining the EAP exemption continues to consider an employee’s duties rather than just an employee’s salary,” the letter reads.

CUNA expressed similar concerns in comments filed with the Department of Labor on the proposal earlier this month.