Understanding New Overtime Regulations

Employers have until December 1, 2016 to comply with new overtime eligibility regulations developed by the U.S. Department of Labor (DOL). The update, announced May 18th, is expected to extend overtime eligibility to 4 million workers. Detailed information, including fact sheets for non-profit organizations, higher education, and local governments can be found on the Department’s website, along with a schedule of free webinars for all employers.

A few of the key details on the new rules:

•  The final rule increases the salary threshold under which most employees will be automatically eligible for overtime pay.  The current salary level required for exemption is $455 a week ($23,660 for a full-year employee), which was last updated in 2004, and the new exemption threshold will be $913 a week, or $47,476 per year.

•  Employers can take up to a 10% credit towards the salary threshold from commissions or bonuses as long as they are paid at least quarterly.

•  In addition, the change in the salary threshold also includes an automatic adjustment every three years. The adjustment will be tied to the 40th percentile of full time salaried workers in the lowest wage region of the country (currently the Southeast).

•  The overtime rule leaves intact the current “duties test” that employees must meet to be exempt, in addition to being paid a salary above the $47,476 threshold.

Legislation to block the new regulations has been introduced in the House (H.R. 4773) and Senate (S. 2707). The Protecting Workplace Advancement and Opportunity Act would also require the DOL to perform a better analysis on the impact changes to the overtime threshold will have on small businesses, nonprofits, regional economies, and local governments, in any succeeding proposed rule.

DOL Releases New Overtime Regulations

Last Wednesday, the U.S. Department of Labor (DOL) announced updates to overtime regulations, which extends overtime eligibility to over 4 million workers. President Obama directed the Department to update the regulations in 2014. Employers have until December 1, 2016 to comply. Key highlights are as follows:

  • The salary threshold will be increased to $47,476 annually ($913/week)—an increase of slightly more than 100% from the current threshold of $23,660 annually ($455/week). The proposed level was $50,440 annually.
  • There will be no changes to the duties test. The DOL had indicated it was considering adding a quantification component similar to California’s that would have required employers to show an employee was performing exempt duties a certain percentage of time to qualify under the specific exemption.
  • The salary threshold will be updated every three years and tied to the 40th percentile of full time salaried workers in the lowest wage region of the country (currently the Southeast).
  • Employers can use nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10 percent of the new standard salary level.

Detailed information including fact sheets for non-profit organizations, higher education, and local governments can be found on the DOL’s website. Informational webinars are also scheduled. The Chamber is working with its partners, including ChamberChoice, to provide additional resources for members.   Legislation has been introduced in both the House (H.R. 4773), and Senate (S. 2707), which would block these new rules.

Flood Protection Project Proceeding On-Time



The Columbia County flood risk management project is about 75 percent complete with full completion anticipated in November. To date, the project is on time and on budget.

Construction started last March with the official groundbreaking following that April.

The $30 million project will preserve over 700 jobs at the Autoneum North America Inc. facility, as well as maintain the potential for industrial development and local employment at the former Windsor Foods site. Without a flood risk management system, the former Windsor Foods facility would be unsalable and fall into a state of deterioration, becoming a blighting influence in the Town of Bloomsburg.

The project continues to have a positive effect on the local and regional economy. The project’s general contractor remains committed to local sourcing of suppliers and subcontractors from the area when it is feasible. Several local suppliers and subcontractors continue to provide material, equipment and labor to the project.

The weather has been conducive, allowing work to continue through most of the winter. Most of the subterranean work is complete. The H-pile and pre-cast concrete panels along West Fifth Street, Magee Avenue and Sixth Street are nearing completion. Most of the concrete work for the closure structures along the West Fifth Street corridor is complete. The structure to be constructed at the western end of the Autoneum facility over the next couple of months is a Mechanically Stabilized Earthen Levee. This type of levee is best described as half of an earthen levee (wet side) and half of a retaining wall (dry side). Work along the North Shore Railroad mainline continues.

On West 11th Street, an earthen levee has been constructed along a portion of the western border of the former Windsor Foods facility. Tying into the earthen levee is a Mechanically Stabilized Earthen Levee which extends to West 11th Street, turns and runs east along West 11th street. Work will begin over the next few weeks to complete the Mechanically Stabilized Earthen Levee. This will allow the construction start of the full earthen levee, which will cross old West 11th Street and connect to high ground in a previously wooded area west of Barton Street.

In addition to the construction of the flood wall, substantial work has occurred and continues on several sanitary sewer pump stations and a storm water pump station.

FMLA Guide Available

From ChamberChoice

In late April, the Department of Labor (DOL) announced that a new general Family and Medical Leave Act (FMLA) Notice will soon be issued. According to the DOL, the new poster won’t necessarily include an extensive amount of new information. Rather, the information in the notice will be reorganized so that it’s more reader friendly. The Agency has advised that employers will be allowed to either continue posting their current Notice or post the new version. Thus, employers are not required to change their current poster.

Along with that announcement, the agency also issued a new guide to assist employers with FMLA administration. Another purpose of the Guide is to help employers increase their knowledge of the law. This Employer’s Guide to the Family and Medical Leave Act is designed to provide essential information about the FMLA, including information about employers’ obligations under the law and the options available to employers in administering leave under the FMLA. The Guide is organized to correspond to the order of events from an employee’s leave request to restoration of the employee to the same or equivalent job at the end of the employee’s FMLA leave. It also includes a topical index for ease of use.

Although the Guide may not provide an answer to every FMLA administration issue an employer may have, it is likely to have some benefit to employers when administering the FMLA.

Representatives Optimistic About 2016-17 Budget Process

The State Representatives for Columbia and Montour counties are optimistic that finalizing a budget for the 2016-17 fiscal year will be quicker than the process for the current year’s budget. Despite a structural deficit of $1.4 to $1.8 billion in the proposal, Representatives David Millard and Kurt Masser feel this year’s negotiations are better. Their comments were made to members during a breakfast program held Friday, May 6th at the Pine Barn Inn.

Jennifer Reis with the PA Chamber of Business & Industry outlined Governor Wolf’s $33.29 billion budget, which represents a 10.9% increase in spending from the finalized 2015-16 plan. Included in the proposal are increasing the personal income tax rate from 3.07 to 3.4 percent, retroactive to January 1, a severance tax on the natural gas industry, and taxing a number of products and services that are currently not taxed. Reis noted that the budget includes no significant reforms to the State’s two public pension systems, or moves toward privatization of the liquor system.

MillardRepresentative Millard highlighted the increasing burden of the pension plans. In the upcoming fiscal year, more than $2 billion will be dedicated to pension obligations. Over the next four years, those costs will increase by more than $1 billion. Rep. Millard has co-sponsored legislation which would put all new hires in a 401k plan, which would ease the burden long-term.

Representative Masser reiterated that it’s past time for Pennsylvania to get out of the liquor sales business, which only generates a 3% profit. “If any CEO was running a monopoly and could only return three percent, I don’t think your days in that position would be long,” said Masser. Privatization of the system could generate significant revenues.   Masser

Masser also stated that this year’s budget negotiating process is better. During an abbreviated, two-day session week last week, the state House positioned H.B. 1999 – the General Appropriations bill for the 2016-17 fiscal year – for a final vote. After bringing up the bill on the House floor, lawmakers withdrew all of their amendments with the understanding that their funding priorities would be addressed at a later date.

The PA Chamber also expects the proposal to increase the minimum wage to be revisited. Earlier this year, Governor Wolf increased the minimum wage for State employees to $10.15 per hour. The Independent Fiscal Office projected in November that an increase in the minimum wage to $10.10 per hour could result in 31,000 lost jobs in Pennsylvania and 500,000 nationwide. The PA Chamber has been advocating for workforce training programs and tax credits to help low wage earners rather than mandated wage increases. Millard and Masser said they are still looking at the potential impacts and solutions to the minimum wage discussion.