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Overtime rules promise challenges for some NH firms

By ELI OKUN
Sunday News Correspondent

May 28. 2016 5:36AM


WINDHAM - A new proposed overtime rule from the Department of Labor could have a major impact on New Hampshire businesses, some of which may be forced to hand out raises, reclassify workers or fire people.

That was the message Thursday from Mark Ventola of the law firm Sheehan Phinney Bass + Green PA, which hosted a major employment law conference at the Castleton Banquet and Conference Center here.

Since its release two weeks ago, the rule has stoked plenty of partisan rancor over its impact on both workers and businesses.

And during a question-and-answer session at the conference, a few of the hundreds in attendance inquired about how the new rule and threshold for overtime pay will affect them - or how they might be able to get around it.

Overtime pay under the Fair Labor Standards Act has previously been required for workers making under $23,660 annually. But the new rule roughly doubles that threshold to $47,476.

One question asked about prorating - could someone who worked half a year and made $25,000 be exempt from overtime pay, since their annual salary would clear the threshold? No, the presenters said: The rules apply to absolute salary earned.

Ventola laid out the new rule's details, most of which come close to (but fall slightly short of) the initial draft released last summer by the Department of Labor.

In addition to the threshold rise, the bar for determining overtime pay will be subject to automatic adjustments every three years, set at the 40th percentile of full-time salaried workers' earnings in the country's lowest-wage-earning census region, which is currently the South.

"The salary level has basically been set at the poverty level," Ventola said, and the Obama administration doesn't believe that's right.

Some businesses were concerned that the government would alter the duties test that determines what are known as "white-collar exemptions," Ventola said, but the new rule leaves it untouched for now.

And in the calculation of salary, businesses are now allowed to include up to 10 percent of nondiscretionary bonuses, commissions and incentive pay.

The rule is slated to go into effect Dec. 1.

"We've got time ready," Ventola said, "but not all that much time."


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