Industry groups representing senior living organizations and other long-term care providers say they generally support the federal government’s proposed salary threshold of $35,308 ($679 per week) under which executive, administrative, professional and certain other employees would be eligible for overtime pay if they work more than 40 hours in a week. They still have concerns, however.
The current salary threshold, in effect since 2004, is $23,660 annually ($455 per week). That compares with a threshold level of $47,476 per year ($913 per week) announced by the Obama administration in 2016, which was enjoined by the courts.
“In our conversations with other business sectors, most seem to be inclined to support the proposed $35,000 threshold, feeling the Obama-era proposal of $47,000 was too steep of an increase from the current $23,000 level,” Argentum Vice President of Government Relations Paul Williams told McKnight’s Senior Living.
The Department of Labor accepted comments through May 21 on the proposed overtime rule it had announced in early March.
In a joint letter submitted to the department, Argentum and the American Seniors Housing Association recommended that the Labor Department round down the threshold dollar amount to an even $35,000 (rather than $35,308) so that it would not be “confusing and hard to remember” for employers. That would translate to a weekly amount of $673. The organizations said that $35,000 should be the maximum amount considered for the salary threshold.
Argentum and ASHA also advocated for the Labor Department to “expedite completion” of the rule and allow for a “rational” phase-in period for employers.
“The regulated community has been uncertain as to how to compensate exempt employees for too long,” Argentum President and CEO James Balda and ASHA President David Schless wrote. “This rule will impact our industry in a significant way and require adequate time to make the necessary adjustments.”
LeadingAge, in a three-page letter, said the $35,308 salary threshold “seems like a reasonable threshold under the current circumstances.”
As had Argentum and ASHA, LeadingAge recommended that the department not automatically adjust the amount every year, calling instead for “public analysis, assessment and comment” before threshold adjustments are made.
“Additionally, some of our members believe that an automatic annual adjustment to the threshold would frustrate their efforts to maintain a stable balance between exempt and nonexempt employees,” LeadingAge Vice President for Legal Affairs and Social Accountability Cory Kallheim wrote.
In its two-page letter, the American Health Care Association / National Center for Assisted Living said it supported the Labor Department’s proposal to use a methodology that led to the $35,308 recommended salary threshold.
“Yet, many long-term care providers of Medicaid-funded services rely on government funding for their operations and cannot absorb this salary level change. It would be challenging to raise rates sufficiently for private-pay residents and patients to cover the increased labor costs,” AHCA / NCAL Senior Director of Policy and Program Integrity Lilly Hummel and Associate Vice President for Workforce and Quality Lindsay Schwartz wrote.
AHCA / NCAL also recommended that the department go through the rulemaking process for future updates to the threshold, rather than implementing automatic increases.
In their five-page letter, Argentum and ASHA also commented on the duties test for determining overtime eligibility, the inclusion of bonuses and commissions in overtime calculations and related matters.
Argentum also was one of 83 organizations signing a 15-page letter to the Labor Department from the Partnership to Protect Workplace Opportunity. That letter also expressed support for the proposed salary threshold and made other recommendations.