AGC Supports DOL’s Reasonable Update to Overtime Rule’s Salary Threshold

On May 21, AGC submitted comments to the U. S. Department of Labor’s (DOL) Wage and Hour Division (WHD) in response to a Notice of Proposed Rulemaking (NPRM) updating the Fair Labor Standards Act (FLSA) overtime regulations. In line with AGC’s recommendations to the WHD, this NPRM is the second step the DOL is undertaking to revisit the Obama administration overtime rule that dramatically increased the salary threshold for exempt employees and would have resulted in unintended consequences, particularly for small construction companies construction employers in lower-wage regions, and construction personnel. In contrast to the Obama rule, this new proposal would simply update the salary threshold using current wage data, projected to January 1, 2020. The result would boost the standard salary threshold for exempt employees from $455 to $679 per week (equivalent to $35,308 per year).

AGC’s comment letter supports and agrees with the Department’s decision that the appropriate methodology for determining the salary threshold is the same methodology used by the Department in 2004, while keeping most other factors status quo. AGC believes that setting a single salary threshold remains the simplest methodology to establish a reasonable level of a “screening” salary for the exemption and makes sense for employers nationwide, including those in lower-cost, lower-wage regions, allowing the economic market conditions to prevail in higher-cost, higher-wage regions. By keeping the methodology consistent with the historical methods and not making any other changes (e.g. multiple salary levels, changes to the duties test) the possibilities of new disruptions, confusion and litigation will be greatly reduced.

AGC will continue to provide input to the DOL on the impact further changes might have on the construction industry and will notify members of any developments.

For more information, contact Claiborne Guy at [email protected] or 703-837-5382.

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