On June 14-15, I was invited to join TIA at their annual policy forum in Washington, DC. As NASSTRAC has partnered with TIA on many transportation issues, it was an opportunity to show solidarity as we continue to advocate for our industry on the Hill. The TIA staff did an amazing job in scheduling over 150 meetings over the day and a half we were there. In many of these meetings we actually met with the representative in addition to his staff.
While I was well aware of two of the initiatives we were advocating for (National Motor Carrier Hiring Standard and Safety Fitness Determination), as NASSTRAC has been vocal in support of these issues, I was surprised to realize how the recent Obama Administration announcement on federal standards for exempting workers from overtime would affect our industry.
Here is some background, courtesy of TIA:
On March 18, 2016, the Obama Administration announced the details of its final rule on federal standards for exempting workers from overtime pay. The new rule will increase the salary level under which workers are eligible for overtime pay, from $455 per week($23,660 per year) to $913 per week ($47,476 per year), and allow for this threshold to be automatically adjusted every three years. Additionally, the higher salary threshold for exempting “highly compensated employees” from overtime pay will be raised from$100,000 per year to $134,004 per year, and up to 10% of bonus compensation will be allowed to be included in calculating non-“highly compensated employee” pay (previously this pay was excluded from calculation).
The updated overtime rule will go into effect on December 1, 2016 for all employers. This dramatic increase will also significantly impact non-profit organizations, as well as colleges and universities, which will struggle to find the funding to provide additional pay to dedicated employees.
While this ruling may not impact our shipper members, it certainly will dramatically affect brokers and other sales positions. As most of you know, brokers (and sales people in general) earn the majority of their salaries in commission. They draw a very low base which is deliberate and incents the sales folks to bring on new customers and increase their pay. Overachievers are rewarded and underachievers either catch up or leave.
Under this new ruling, brokers will be forced to raise base pay which will demoralize the high achievers and possibly cause a loss in jobs as these small business owners will be forced to relieve those underachievers or slow starters as they won’t be able to afford to carry them with such high base salary levels.
Additionally, how would brokers monitor after hours operations? Brokers are often provided with company phones and computers. How do you monitor time spent after hours? And, if you tell them not to answer their phones to avoid overtime pay, how do you provide the high level of customer service shippers have come to expect from our providers?
TIA requested that members of Congress sign on to support the Protecting Workplace
Advancement and Opportunity Act, which is S. 2707 in the Senate and H.R. 4773 in the House. This bill would provide statutory protections for employers and workers who will be harmed by the dramatic increase in the overtime pay thresholds.
This Act will nullify the final rule and require the Department of Labor to conduct an economic analysis on the impact that increasing the mandatory overtime salary threshold will have on small businesses, non-profit employers, and public entities. This Act will also statutorily prohibit the automatic increase of the salary threshold that is included in the final rule. The overtime pay threshold has never been subject to an automatic increase before, and it is important that Congress and the American public have an opportunity to carefully consider the impacts on small business of any future increase. This Act is supported by the TIA, the Society for Human Resource Management, and the U.S. Chamber of Commerce.
I believe NASSTRAC should support this effort as well. Please email your representatives today asking them to support the Protecting Workplace Advancement and Opportunity Act.