Coming to design firms near you: Changes to overtime rules

{"version":"0.3.0","atoms":[],"cards":[],"markups":[["a",["href","http:\/\/www.dol.gov\/whd\/overtime\/nprm2015\/","target","_new"]],["em"]],"sections":[[1,"p",[[0,[],0,"A "],[0,[0],1,"proposed federal rule "],[0,[],0,"that would expand the number of employees eligible for overtime pay is raising concern among American employers including those in the design industry."]]],[1,"p",[[0,[],0,"The Department of Labor rule that could be finalized as early as April would more than double the salary threshold under which employees are eligible for overtime pay. "]]],[1,"p",[[0,[],0,"Under current law, workers who earn less than $455 a week or $23,660 a year must be paid time and a half if they work more than 40 hours a week. The rule would more than double that level, qualifying employees earning less than $970 a week or $50,440 a year for overtime pay. The rule also would automatically adjust the salary threshold to inflation each year."]]],[1,"blockquote",[[0,[1],1,"Proposed rule would increase the number of employees eligible for time and a half overtime pay"]]],[1,"p",[[0,[],0,"The goal of ensuring overtime pay for eligible workers was established by the Fair Labor Standards Act of 1938. The law set the first salary threshold that has since periodically increased to keep pace with inflation. The threshold was last adjusted in 2004."]]],[1,"p",[[0,[],0,"Why the change? When first put into place, the threshold covered 60 percent of workers. Today, even with occasional updates the threshold applies to 8 percent of the workforce. The DOL argues that the revised threshold would again encompass up to 60 percent of workers and restore the original intent of the law."]]],[1,"p",[[0,[],0,"While there is support for increasing today\u2019s threshold, the scope of the proposed rule has raised questions about its cost and timing. Employers say more than doubling the current salary threshold is unprecedented given flat revenue earnings and low levels of inflation since the last adjustment. The design and construction industry was among the hardest hit by the 2008 recession. Architects are still feeling the ripple effects of the financial downturn and an increase in labor costs could pose an additional burden."]]],[1,"p",[[0,[],0,"The rule is likely to hit small businesses particularly hard. Close to 80 percent of architecture firms employ ten or fewer people. Small firms that lack in-house accounting departments will find themselves devoting more time and resources to complying with the new rule particularly because the salary threshold could change each year."]]],[1,"p",[[0,[],0,"Another focus of concern is that the salary threshold would be applied nationwide; an approach that opponents say fails to take regional cost-of-living differences into consideration. For example, the DOL\u2019s proposed salary threshold is about $10,000 higher than California\u2019s and $15,000 higher than New York\u2019s -- two of the highest-cost states in the nation."]]],[1,"p",[[0,[],0,"So what does this mean for AIA members? While the rule is expected to impact the retail and hospitality industries more than in the architectural field that doesn\u2019t mean design firms will be left untouched. Even if each design professional already earns more than the new threshold, support staff probably does not. Such workers will have to be considered and their hours closely tracked. Design firms will have to start planning to ensure they\u2019re not caught off guard when the changes go into effect."]]],[1,"h3",[[0,[],0,"About the author"]]],[1,"p",[[0,[1],1,"Alex Ford is a manager of federal relations at the AIA."]]]]}