The final Overtime Rule from the Department of Labor becomes effective December 1, but separate lawsuits — one by a coalition of 21 states and the other by 50 business groups including the U.S. Chamber of Commerce — seek to block it in a Texas district court.

On the legislative end, H.R.6094, which provides for a six-month delay in the effective date of this rule, was introduced in the House on Sept. 21 by Rep. Tim Walberg (R-MI) and passed 246-177 on Sept. 28, right before the House adjourned for election recess. A related bill (S.3429), introduced by Sen. David Vitter (R-LA) and moved into committee, would delay implementation of the overtime rule for a period of two years in states in which the president has declared that a major disaster exists. Still another bill (H.R.5813) would revise the rates of pay of exempted employees through graduated increases from 2016 to 2019.

What the overtime rule does: The rule raises the minimum salary threshold to qualify for the Fair Labor Standards Act’s exemption from overtime from $455 a week to $913 a week. It also automatically updates the salary threshold every three years.

How will this impact meetings and venues? Lisa Hill, director of conferences and events — operations, College & University Professional Association for Human Resources, and Joette Mitchell, vice president/executive education and meetings, CUES, described the challenges during a panel session at ConferenceDirect’s recent CDX meeting.
Staff. “Only a few individuals within our small, seasoned staff would change from exempt to non-exempt status,” said Hill. CUPA-HR estimated the range of potential impact by adding one hour of overtime for 52 weeks to their salaries (at the low end), and then five hours (at the high end). “We expect that some key staff members will fall below the threshold and become non-exempt. We are estimating this to cause about a 1 percent  increase in cost,” she explained. CUES analyzed previous positions with an average of 300 to 500 overtime hours a year, explained Mitchell. The new rule will result in a 9 percent increase in costs for the two current meeting planners.
Vendors. How much of vendors’ costs to comply with the new rule will be passed on to meeting groups is an open question. So Hill and Mitchell advise that you carefully determine service fee caps and the number of service personnel your meeting actually needs. “If contracts are in place, audiovisual or decorator vendors, for example, can’t unilaterally impose increases unless the contract otherwise provides,” said Barbara Dunn O’Neal, partner, Barnes & Thornburg LLP, and MeetingMentor’s legal columnist.
Attendees. Hill worries that the extra dollars attendees’ organizations usually set aside for training and personal development won’t be there because of the OT rule, or that a meeting pattern (say Sunday to Tuesday) may not make sense with this rule. “We may have to rethink four-and-a-half-day programs,” noted Mitchell, “perhaps with more blended learning than in the past.”

Action items:
• Plan work schedules and roles with care. ”In my organization, overtime must be planned and approved. I will have to be more mindful much farther in advance and manage the planning process differently. Some duties will change and land in different areas; some of us will take on more responsibilities,” said Hill. Example: If the non-exempt employee’s role is registration, his or her hours must be used for that purpose, noted Mitchell.
• Look back and ahead. “We will track hours to make sure we’ve made the right decisions,” said Mitchell. “We don’t know what the new cap will be in 2019, so will we have to back-pedal in the future?”
• Set guidelines and educate employees. “We definitely have to create a policy about work hours after the normal work day, such as if work is done (or not) on a plane,” Hill said. Examples: If the lowest-cost flight at 5:00 a.m. incurs a lot of overtime, that may not be the “least expensive” option. As well, non-exempt employees need to be told that they can’t pick up phone calls or check e-mails outside of normal work hours.

What about the lawsuits? According to a legal alert from Barnes & Thornburg LLP, “Both lawsuits argued that the new regulations are an overreach by the Department of Labor and the executive branch under the Administrative Procedures Act. The states’ lawsuit argues that the DoL’s rule disregards the text of the FLSA (Fair Labor Standards Act) and imposes ‘a much-increased minimum salary threshold that applies without regard to whether an employee is actually performing “bona fide executive, administrative, or professional” duties.’ The business group lawsuit voiced parallel concerns…”

Can these filings delay the rule’s implementation on Dec. 1? It’s possible, said O’Neal. But for now, “our guidance to our clients is to prepare for compliance.” — Maxine Golding