This past July, the federal government sent the shot over the bow to all employers in America that there will be changes to federal overtime rules. In advance of the December 1, 2016 implementation date, the National Association of Women in Construction (NAWIC) Guam Chapter used their August Monthly meeting to discuss this important change with their membership. Member and Chief Operating Officer of Pacific Human Resources Services Inc. Grace Donaldson broke down the final rule changes to the Fair Labor Standards Act. Donaldson shared that the final rule focuses primarily on the updating the salary and compensation levels needed for Executive, Administrative and Professional workers to be exempt.
Among the changes, the rule sets the standard salary level at the 40th percentile of earnings of full-time salaried workers, sets the total annual compensation requirement for highly compensated employees (HCE) subject to a minimal duties test and establishes a mechanism for automatically updating the salary and compensation levels every three years to maintain the new percentile levels. Donaldson used examples and sought member input and questions relative to the duties test to better understand the impacts to the Guam workforce.
Donaldson noted that Guam's visitor industry would be hit the hardest with this rule change. The hotel industry relies heavily on modestly paid middle managers, who are exempt from overtime, to pick up the slack—and extra hours—when called upon. Some of the flexibility may be a thing of the past as property owners adjust to the new rule.
The changes could rattle industries that have long used a federal exemption for so-called “creative professionals” to avoid paying some workers overtime, like architects. The US Department of Labor currently gives businesses some latitude in deciding who meets the criteria. But under the new rules, no one making less than $47,476 a year could be considered a creative professional exempt from overtime.
Even the American Society of Travel Agents (ASTA) has formally asked DOL for removal from the regulatory list that blocks travel agents from an exemption from federal overtime rules.
Will there be an end?
One thing is for sure, change is coming and the Guam NAWIC Chapter will be keeping a close eye on its developments as we head into the latter half of the year.
GET, LLC is proud to be a member of NAWIC and the Guam Chapter-one of 150 chapters with a network of 4,500 members nationwide. We hold NAWIC's core values close to our business- Believe. Persevere. Dare. Check out our website at www.get-guam.com or drop us a line to help us do our part to grow this important industry.