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New Overtime Rule and the Impact on Associations

ASAE is continuing to gather feedback from members who are concerned about the Obama administration’s pending regulations to raise the salary threshold at which eligible workers qualify for overtime pay. Under current Department of Labor (DOL) regulations – last updated in 2004 – employers are required to pay all eligible employees time-and-a-half for any hours they work in excess of 40 hours per week if they make $23,660 or less per year. The proposed rule would more than double that salary threshold to cover all overtime-eligible workers making $50,440 or less per year. ASAE urges you to review the rules at the Power of A website here and contact ASAE Public Policy team at publicpolicydept@asaenet.org if you believe they will impact your organization.

ASAE has heard from many association professionals who are concerned that some of their exempt employees will now be eligible for overtime under the new salary threshold or will have to be switched to hourly pay. Many association employees currently qualify as exempt from overtime eligibility because their annual salary is greater than $23,660 and because their primary duties fall under the executive, administrative and professional (EAP) exemption included in the original Fair Labor Standards Act of 1938. While the rule won’t likely be finalized for months, the change could force companies to keep closer tabs on hours worked by overtime-eligible employees, including how to handle work done out-of-office, such as responding to emails in the evening or working at a conference over a weekend.

While the DOL’s recent Notice of Proposed Rulemaking focuses primarily on updating the salary threshold for overtime-eligible workers, the Department is seeking comments on whether the current duties test is working as intended or needs to be modified. As an example, the Department asks whether employees should be required to spend a minimum amount of time performing work that is their primary duty in order to qualify for exemption. As many salaried association employees perform all sorts of duties in the course of their work, it’s possible that a change to this regulatory language could turn many exempt positions into overtime-eligible positions.

ASAE is continuing to gather specific examples of how its members’ associations might be impacted by changes to the current rule, which will be incorporated into our comments, due to the DOL by Sept. 4, 2015.