Labor Department’s New $35K Overtime Threshold Has Skilled Nursing Advocates Worried

This article was written by Marty Stempniak for McKnight’s Long-Term Care News

Skilled nursing advocates are voicing concern about an expected Department of Labor proposal that would greatly increase the number of employees eligible for overtime pay.

Under the proposal, workers earning less than $35,000 a year would be eligible for overtime pay, Bloomberg Law reported Thursday, citing anonymous Labor sources. The rule would raise the threshold under which employees can automatically earn OT wages from the current $24,000. It also would update time-and-a-half requirements for hours worked beyond 40 per week.

Barbara Gay, VP of public policy communications for LeadingAge, said the change would pose a challenge for providers who are already operating on razor-thin margins, and “cannot simply raise their prices in order to cover increased labor costs.”

“A mandatory increase in labor costs will challenge our members, who are already contending with a severe workforce shortage, particularly among hourly staff,” Gay told McKnight’s Friday. “We have to be concerned about policies that would increase members’ labor costs because many of our members would not have the resources to cover them.”

The rule had not yet been released as of late Friday and Bloomberg noted that if it materializes, it would likely be challenged in court by both worker advocates who believe it doesn’t go far enough, and pro-business groups concerned about escalating payroll costs. This would be the first update to overtime pay requirements in 15 years. A previous proposal by the Obama administration would have upped the threshold to $47,000, but a federal judge blocked that proposal in 2017.

Department of Labor officials are also mulling ways to periodically boost the salary threshold for OT eligibility to keep pace with inflation, Bloomberg noted. That is expected to be addressed at a later date.

The White House Office of Management and Budget has been reviewing the OT proposal since mid-January, and regulators hope to finalize it before 2020 so that a Democrat president can’t overturn the rule if Donald Trump loses next year’s election, the Bloomberg report noted.

Posted in Federal News