ICBA opposes Labor Department overtime proposal

ICBA expressed strong opposition to a Labor Department proposal that would increase the number of employees who are entitled to overtime compensation.

ICBA Opposition: In a comment letter on the proposal to increase the overtime exemption salary threshold for white-collar workers, ICBA said the change:

• Would far outpace the rate of inflation and be unduly burdensome to small businesses.

• Could force community banks to reduce staff, shorten business hours, curtail services, close branches, and reduce employees’ hourly pay.

• Likely exceeds the department’s legal authority because it would arbitrarily require millions of employees who work in bona fide executive, administrative, or professional roles to be paid overtime.

Overtime Proposal: The Labor Department’s proposed rulemaking would raise the threshold for exempt salaried employees from $35,568 to $55,068 annually, requiring businesses to extend overtime pay to a greater number of executive, administrative, and professional workers.

Background: The Labor Department in 2019 issued an overtime final rule that was based on its 2004 overtime methodology, as advocated by ICBA. That final rule—which came after a federal judge in 2017 struck down a rule issued in 2016—increased the salary level test from $23,660 to $35,568 per year and the total annual compensation level for "highly compensated employees" from $100,000 to $107,432 per year.