Earlier today, the U.S. Department of Labor announced a proposed rule to increase the threshold for employees to be eligible for overtime. Workers earning less than $55,068 per year would be eligible under the proposed rule, up from the current $35,568 per year. This threshold would be automatically updated every three years to reflect current earnings data.
The rule clarifies which employees are executive, administrative or professional employees, who are then exempt from overtime pay. It is estimated that the new threshold would extend overtime eligibility for an additional 3.6 million salaried workers.
The proposed rule follows a similar effort by the Obama Administration to reclassify the overtime threshold, which would have raised it to roughly $47,000. That proposal was blocked in 2017, as it was determined that it would have made the job duties portion of the exemption test irrelevant. It is likely that today’s proposal will face similar legal scrutiny.
Argentum is closely reviewing the proposed rule and its impact to senior living communities. We are concerned about any proposal that would exacerbate the workforce challenges already being faced in the industry. The long-term care sector lost more than 400,000 jobs during the pandemic, almost 7% of the total pre-pandemic employment base. The long-term care sector must also attract more than 20 million workers by 2040 to meet the care needs of our rapidly aging population.
The proposed rule will be open for public comment for 60 days after publication in the federal register. Argentum will be submitting comments on behalf of the association outlining our concerns and potential impact to the industry.