National insurance agents association cites “improvement" from previous regulation.
WASHINGTON, D.C., September 25, 2019 — Members of the Independent Insurance Agents & Brokers of America (the Big “I"), along with other employers, will have just under 100 days to comply with a final overtime rule announced yesterday by the U.S. Department of Labor (DOL). Effective January 1, 2020, the rule sets the minimum salary threshold for overtime eligibility at $35,568. The regulations implement the Fair Labor Standards Act (FLSA)'s overtime mandate and will make an estimated 1.3 million additional U.S. workers eligible for overtime pay.
“While not perfect, the final rule is a significant improvement over the overtime rule proposed during the Obama administration, which would have caused a significant increase in direct compliance costs and paperwork burdens for our small business members as well as significant losses in productivity for the economy," says Charles Symington, Big “I" senior vice president of external, industry & government affairs. “While still a challenge for many of our members, we appreciate that the final rule did not set any automatic updates and that employers will at least be able to count non-discretionary bonuses, incentives and commissions--up to 10% of an employee's salary--toward the threshold."
The FLSA's exemption threshold for “highly compensated employees" will be set at $107,432, lower than in DOL's initial draft but still higher than the previous threshold of $100,000.
In 2016, the Big “I" was the only insurance trade association to join a lawsuit with the Chamber of Commerce, the National Federation of Independent Business and other business groups to successfully prevent the DOL from moving forward on the previous rule which had doubled the exemption threshold from $23,660 to $47,476 for “white collar" exemptions and raised the exemption threshold from $100,000 to $134,004 for “highly compensated employees." It had also set automatic updates to the thresholds every three years. The Big “I" was concerned the 2016 rule would have diminished employee flexibility, increased administrative burdens and costs on small businesses and negatively impacted insurance consumers through reduced customer service.
“Even with these changes, a number of our member agencies may still find it difficult to comply with these exemptions," says Heather Eilers-Bowser, Big “I" counsel, federal government affairs. “While the new minimum thresholds for 'white collar' exemptions and 'highly compensated executive' employees are much lower than proposed during the last administration, they remain a concern for many independent agents and brokers."
Founded in 1896, the Independent Insurance Agents & Brokers of America (the Big “I") is the nation's oldest and largest national association of independent insurance agents and brokers, representing more than 25,000 agency locations united under the Trusted Choice brand. Trusted Choice independent agents offer consumers all types of insurance—property, casualty, life, health, employee benefit plans and retirement products—from a variety of insurance companies.