New Overtime-Pay Exemption Rule, Plus Steps You Can Take to Combat Opioid Abuse

Contractors need to be aware of changing rules governing who gets overtime pay as well as options available to minimize opioid abuse in one of the most susceptible industries

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Remember almost three years ago when the Obama Department of Labor issued a rule increasing the white-collar overtime-exemption salary test by nearly double. Under currently enforced law, employees with a salary below $455 per week ($23,660 annually) must be paid overtime if they work more than 40 hours per week. Workers making at least this salary level may be eligible for overtime based on their job duties. The Department of Labor's rule change would have raised the exempt annual salary to $47,467. 

The 2016 pay-threshold change was enjoined by federal courts leading to much litigation and gnashing of teeth. Ultimately, when Trump took office, the Department of Labor announced that it would revisit the rule. They have done so and published in the Federal Register a Notice of Proposed Rulemaking (NPRM) that would revise the salary exemption.

The NPRM does several things. First, it formally rescinds the 2016 final rule, thereby getting the Department of Labor out of the ongoing litigation. Second, and more important for contractors, the proposed rule would increase the standard salary minimum to $679 per week or $35,308 per year (workers who make less should receive overtime pay for weekly hours more than 40). Third, the proposed rule simplifies the exemption test because it only applies one threshold regardless of the exemption, industry, or location. Fourth, no changes were proposed for the duties tests for the exemptions. In other words, if someone qualified for the exemption before based upon their duties they should still qualify once this rule is adopted in final form. Finally, the proposed rule does away with “automatic” annual updates to the salary threshold.

So what should contractors do now? The Department of Labor anticipates this will probably take effect next January. This gives contractors plenty of time to prepare for the rule. The Department of Labor has gone through extensive public commentary regarding this rule already. Thus, it is likely that little will change between the proposed rule and the final rule. Moreover, it is not expected that the Department of Labor will take a long time to issue a final rule after the 60 day comment period ends at the end of May.

US Department of Labor Overtime Pay page

Prudent contractors will evaluate their pay practices and assess which employees might be impacted by the proposed rule. Then, contractors may have to adjust pay practices by increasing salary guarantees or converting covered employees from exempt status to non-exempt status. Of course, in the latter case, the employee may now be eligible for overtime pay, i.e., time and a half for hours over 40 in a pay period. If in doubt about the rules impact on your workforce, you are urged to seek competent legal counsel.

Opioid Abuse

Now let’s talk about a looming issue for almost all contractors. Opioid abuse has reached critical levels. 75% of employers polled by the National Safety Council (NSC) state that their workplace has been impacted by opioid abuse, but only 17% of those surveyed felt that they were well prepared to deal with the issue. Today, more than 100 people die per day from opioid overdose. For the first time in US history, you are more likely to die from an accidental opioid overdose than from a motor vehicle crash. Workplace overdose deaths from alcohol or drug abuse have increased by at least 25% for the last five years.

Other pertinent findings from the NSC survey: Employers tend to focus more upon hiring, benefits, and worker compensation costs than upon the true cost of illicit opioids, but the fact of the matter is that opioid abuse affects all areas of employment. Even though 86% of employers believe taking opioids can adversely affect work performance only 60% have effective drug policies in place that prohibit prescription abuse. Nearly 80% of employers do not feel confident that any individual employee can spot symptoms or signs of opioid abuse.

So what should concrete contractors do? First, NSC has some very useful tools and excellent educational materials. For example, to find out the true costs of opioid abuse in your workplace, go to  You will be asked to enter your industry, location, and number of workers. By providing your email address, you will get an instant report detailing the likely number of affected employees and the probable cost to your business.

Second, contractors should educate themselves extensively about this problem. You will quickly discover that you need to partner with your insurance carriers, your medical and pharmaceutical providers, and your employee assistance program providers to effectively deal with this issue. Next, you will need to re-evaluate your drug testing policy and how it’s really working. You will also want to invest in educating your managers and your employees about opioid abuse and prevention. Finally, it almost certainly is worth the investment to increase and ensure confidential access to health care and treatment.

You cannot prevent every instance of opioid abuse, but if you follow some of these steps, you can minimize its impact.