By Cristeena G. Naser
On July 16, Karen Glenn — president and CEO of First United Bank and Trust Company, Madisonville, Ky., and member of ABA’s Community Bankers Council — participated in a roundtable hosted by the Small Business Administration on the Department of Labor’s overtime proposal. The proposal would more than double the salary basis test — the level below which all employees must be paid overtime beyond 40 hours per week, regardless of their duties — raising it to $50,544 per year. Glenn said that the variance in the cost of living from state to state was not taken into consideration in DOL’s calculation of the new salary test. She also cited the number and percentage of employees in her bank that would no longer be exempt, the potential additional overtime costs and the impact of the change to non-exempt status on employee morale, particularly with respect to branch managers.
ABA opposes these changes and is advocating on behalf of our members in a number of arenas. ABA is part of the Partnership to Protect Workplace Opportunity (PPWO), a broad coalition of trade associations opposing the proposal. The PPWO, as well as ABA and other bank trade associations, have filed letters seeking an extension of the comment period, now set for September 4. ABA will participate in a joint trades letter responding to the proposal and will file its own letter focused on the impact on community banks.
ABA needs feedback from you to effectively inform DoL of the impact on community banks. We need you to share your stories of how the proposal would affect your bank for inclusion on an anonymous basis in ABA’s own letter. You may want to consider presenting the following aspects of your stories:
• Number of currently exempt employees who do not earn $50,544 annually and their percentage of your total workforce;
• Potential costs of overtime;
• How long such employees have been exempt;
• Possible morale problems as a result of losing exempt status;
• Whether the other employee benefits (health care, etc.) you provide are higher than in your general area, i.e., the total compensation package; and
• Loss of flexibility for both the bank and its newly non-exempt employees.
Please send stories to me at email@example.com.
ABA will have a 90-minute briefing on the proposal and its implications for the banking industry at 2:00 p.m. EDT on July 30. I will also participate in an SBA roundtable in Washington, D.C. tomorrow. One more roundtable is planned for New Orleans on August 12.