Security industry alarmed about overtime pay rule

New law more than doubles income threshold for eligibility
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Tuesday, August 16, 2016

WASHINGTON—The U.S. Department of Labor (DoL) recently submitted revisions to the Fair Labor Standards Act that would more than double the salary threshold for earning overtime pay, starting Dec. 31, 2016.

Presently, only those employees making less than $455.00 per week are eligible for overtime compensation. The DoL’s new rule increases this eligibility minimum to any employee making less than $913.00, an increase that many in the security industry and on Capitol Hill feel will put a financial strain on businesses.

ESA has actively spoken out against DoL’s overtime rule, and supports efforts in congress by Rep. Virginia Foxx (R-NC) and Sen. Lamar Alexander (R-TN), who recently introduced joint resolutions to block implementation of the Overtime Rule.

“The most critical aspect to this rule is that $1.4 trillion is being transferred from businesses to employees when the rule goes into effect,” John Chwat, ESA director of government relations, told Security Systems News. “So that is very overwhelming for the business community, and that includes ESA, and any company that has white-collar workers, which is the majority of ESA companies. We hear from our members that by doing this, it is going to impact jobs and the bottom line, which is profitability.”

Joseph Hoellerer, SIA Government Relations manager, agrees. He told SSN that although SIA did not file any formal comments during the proposed and final rule stages of this regulation, “we certainly share ESA’s concerns of the adverse impact, specifically toward small businesses, because 80 percent of SIA’s membership is composed of small businesses.”

Legislation against the rule includes Senate Joint Resolution 34, which was introduced on June 7, 2016, and was referred to the Senate Committee on Health, Education, Labor, and Pensions. With Senate Majority Leader Mitch McConnell (R-KY) as a cosponsor, the resolution has already attracted more than 43 senators to support its passage. The House version, House Joint Resolution 95, has been referred to the House Committee on Education and the Workforce with 22 House members as cosponsors.

Feeling pressure from the business community, congressmen Kurt Schrader (D-OR), Jim Cooper (D-TN), Henry Cuellar (D-TX) and Collin Peterson (D-MN) introduced legislation, the Overtime Reform and Enhancement Act, which will initiate a three-year phase-in of DoL’s new overtime rule. The plan will incrementally phase in the new threshold of $47,476 over the next three years, beginning with a 50 percent increase this December.

While congress is not in session, Chwat said that ESA members should express their opposition to the rule by reaching out to their elected officials, and giving them a copy of ESA’s comments on the rule.

“Members of the House and Senate, in the month of October, are back in their districts and back in their states and members should contact their federal elected official to say how opposed they are to the administration’s regulation abuses here,” said Chwat. “There is no bill, there are no hearings—this is just done by administrative rule-making fiat. Beyond that, members should support the republican’s bill to change this and get in touch with ESA on how they can support efforts to repeal this rule.”