Reyes speaks on Overtime Regulation at National Association of Counties Annual Conference

By Janis Reyes, Assistant Chief Counsel

In July, I traveled to sunny Long Beach, CA, to speak at the 2016 National Association of Counties (NACo) Annual Conference regarding upcoming federal regulations affecting counties across the nation. The Office of Advocacy is the voice for small entities to the federal government, including over 2,000 small counties with a population of less than 50,000 (over 68 percent of all counties in 2015).

Today’s blog post is about my first panel on the U.S. Department of Labor’s (DOL) final overtime regulations and its impact on local governments, which is effective on December 1, 2016. Also on the panel were DOL Western Region Director of Enforcement Richard Longo and private attorney Larry Stine. Under the Fair Labor Standards Act (FLSA), employees are entitled to overtime pay if they work over 40 hours a week. However, there are many exemptions under the FLSA. This final rule amends the FLSA “white collar” exemption from overtime pay for executive, administrative and professional employees. The new rule updates the salary threshold that determines which employees can use this exemption, increasing this threshold from $23,660 to $47,476. All county employees, including managers, making under $47,476 will be eligible for overtime pay in December 2016.

First, Longo provided a briefing of the final rule. DOL has made available a similar webinar, a small business compliance guide and other helpful materials on its website. Then, I discussed Advocacy’s involvement with this rulemaking, such as completing five roundtables across the country and submitting a public comment letter based on this feedback. I also discussed special considerations for small counties and municipalities, such as their ability to utilize other exemptions and compensatory time off (instead of overtime). DOL has a fact sheet with this information. I also shared the interesting conversations I have had with county managers, who have expressed concern that this rule would have significant economic impacts for small counties and municipalities because of their budget constraints. For example, I spoke to a commissioner of a Nevada county with a population of less than 5,000 who stated that she estimates that her county would spend $25,000-$45,000 to comply with this rulemaking. She stated that there are difficulties in paying for and implementing this rule because her county’s budget is already in place for the year and all decisions regarding employees must be discussed and approved in open meetings. She anticipates cuts in the hours of non-emergency personnel. I also discussed some small business feedback on options to comply with this rulemaking, such as changing salaried managers to hourly workers, and increasing employee salaries above $47,476. Panelist Longo discussed other budget-neutral options to comply with this regulation.

The best part about attending this four-day conference was obtaining more feedback from elected officials and managers of small counties from all over the country on this overtime rule. In particular, I enjoyed attending the meeting of the Rural Action Caucus, who represents rural counties. Advocacy is working with DOL on getting more compliance information to small entities on this rulemaking, such as a webinar focused on small businesses and regional events. For more information, please contact me at Janis.Reyes@sba.gov.