ABC and more than 900 members submitted comments in opposition to the U.S. Department of Labor (DOL), Wage and Hour Division’s July 6 Proposed Regulations for Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees. If enacted, the proposal, commonly referred to as “the overtime proposal,” would more than double the minimum salary for the white collar overtime exemption and would automatically update the salary levels on an annual basis. 

“Employers and employees throughout the construction industry have come to rely on the current definitions of exempt job categories,” explained ABC in its comments. “If the proposed unprecedented increase in the minimum salary of exempt staff becomes final, it would be extremely disruptive and harmful to both employers and many of their currently exempt employees, and would be destabilizing to the construction industry as a whole.”

DOL estimates that the proposed rule would require the reclassification of 4.6 million exempt workers in the absence of salary increases. “By requiring large numbers of exempt executives, administrators and professionals to be reclassified, among other changes, the proposal would greatly restrict the flexibility needed to provide high-quality construction services,” ABC noted. “It would also hurt career advancement opportunities for employees, injure the morale of reclassified exempt workers, increase the likelihood of lawsuits and increase the administrative costs of construction industry operations, with little or no benefit to the employees themselves.” As a result, ABC warned that this massive reclassification is likely to lead to a significant decrease in the number of exempt employees nationwide and could eliminate the overtime exemption altogether in many parts of the country. 

ABC also confirmed its support for the current duties test used to classify exempt and non-exempt employees. DOL failed to make any specific proposals to alter the test but instead requested comments on hypothetical changes based on California’s percentage-of-time rule and the previously abandoned federal long-form standard. ABC contended that these suggested changes would only subject employers to “new and burdensome recordkeeping requirements” and leave them “hopelessly exposed to lawsuits regarding the accuracy of such records.” 

For the last several months, ABC has opposed the overtime proposal. As a member of the Partnership to Protect Workplace Opportunity (PPWO), ABC has worked to educate members of Congress on the proposal’s impact on small businesses and submitted a letter to the House Subcommittee on Workforce Protections in conjunction with its July 23rd hearing. ABC and PPWO also submitted a request to extend the comment period. Following DOL’s denial of the request, ABC submitted its final comments on Sept. 4. 

To read ABC’s comments to DOL, click here

To read PPWO’s comments, click here

For more information on the Partnership to Protect Workplace Opportunity, click here.