Overtime Rule Could Affect Operations, ATA Says

This story appears in the May 23 print edition of Transport Topics.

The Obama administration’s new rule to guarantee that several million workers be eligible for overtime pay could affect dispatchers and operations personnel at trucking companies, industry officials said.

The rule, unveiled May 18, raises the overtime pay exemption threshold by more than 100% — a move backed by unions and other groups and criticized by many businesses.

Put forth by the Department of Labor, the rule sets at $47,476 the minimum salary for overtime exemption from the current threshold of $23,660.

“We’re making it simpler for employers to identify which white- collar workers are covered and owed time-and-a-half for work beyond 40 hours in a week,” Secretary of Labor Thomas Perez said.

But American Trucking Associations views the rule as another government-created “burden” on the trucking industry, which is 97% small businesses.

“Dispatchers whose duties qualify them for the administrative exemption and who earn more than the outgoing $23,660 threshold” but who earn less than the new threshold of $47,476 will lose that exemption, Richard Pianka, acting counsel at ATA, told Transport Topics on May 19.

Interstate drivers and certain safety-regulated employees are covered by a separate Fair Labor Standards Act overtime exemption that is unchanged, Pianka added.

More than 4 million more workers would be eligible to earn time-and-a-half wages for every hour they are clock in after 40 per week, according to the government agency’s estimates. The rule doesn’t impact hourly workers who already must be paid overtime. Bonuses and incentive payments will count up to 10% of the new salary threshold.

“While ATA appreciates the DOL’s bonus-related provisions and that it adopted a salary threshold modesty lower than it contemplated in the proposed rule, we are very disappointed that it chose to reject our industry’s request to clarify that dispatchers meet the requirements of the administrative exemption,” said Sean McNally, spokesman for the federation.

Aside from ATA, dozens of groups also have expressed concerns about the rule.

Opponents have argued the rule would potentially eliminate jobs, prevent upward mobility for junior executives and result in downsizing. Business executives also argued the changes would significantly raise labor costs.

The American Truck Dealers, a division of the National Automobile Dealers Association, had been opposing any increased salary thresholds. ATD told members it is developing outreach materials on the rule’s impact on dealerships and their employees as well as evaluating potential litigation.

The National Retail Federation is another opponent. “DOL’s new overtime rules are a massive failure. They are a failure of the regulatory process. They are a failure to listen. And, most of all, they are a failure to face reality,” said David French, senior vice president of government relations with the National Retail Federation.

Support, however, came from unions and other trade groups.

Robert Voltmann, president of the Transportation Intermediaries Association, said it was encouraging the administration “listened to businesses’ concerns and calculated commissions into their compensation design.”