Bizav Groups Warn Members To Prepare for New Labor Rule

Business aviation organizations are warning their members to prepare for one of the most significant changes to the mandatory overtime threshold since the regulation was established.

On May 17 the Department of Labor released the final rule essentially doubling the minimum salary for employees “exempt” from mandatory overtime requirements. Effective December 1, the threshold will jump to $47,476 from $23,660. The rule further calls for an update of the salary threshold every three years, taking into account wage growth over time. The Department of Labor said the rule is designed to provide greater clarity for workers and employers and fortify predictability and worker protections. The Department of Labor added that the rule could nearly double the number of employees eligible for mandatory overtime to 11 million from 6 million.

NBAA released guidance on preparing for the change, saying, “The changes to overtime exemption regulations are among the most substantial since the introduction of the Fair Labor Standards Act (FLSA) in 1938.”

“It’s one of the largest jumps since the statute was enacted,” added Greg Ripple, chair of NBAA’s Employment Issues Working Group and a partner at the Miller Johnson law firm, who developed the resource for NBAA members. “Under the new rules, almost every employee who makes less than $47,500 will be entitled to overtime pay.” Noting that the minimum will be adjusted every three years, Ripple added, “Employers are going to be constantly having to evaluate the salaries of their exempt employees who are on the cusp.”

“These overtime exemption changes will affect nearly everybody in the industry,” added Brian Koester, NBAA manager of operations. “It’s important for our members to begin preparing for compliance now.”

The regulation was adopted over the objection of numerous organizations, among them the National Air Transportation Association. NATA said it would “inhibit the promotion of employees to management positions and return some current managers to hourly status. The end result will be reduced take-home pay and loss of benefits.”

NATA noted that aviation businesses are spread throughout the nation, often located in areas where the cost of living is relatively low. “These businesses will be especially hard hit by this ‘one-size-fits-all’ proposal,” the association said.

The NBAA guidance can be found at www.nbaa.org/admin/personnel/flsa/overtime-exemptions/.