Volume 2, Issue 7 | April 28–May 25, 2016 communityimpact.com/socialPLANO EDITION

04 IMPACTSNow Open, Coming Soon & more

9 BUSINESSAqua-Fit/ Fit 2 Family Wellness Center

10 DININGLockhart Smokehouse

12 DEVELOPMENTLegacy Hall dining venue

Existing federal rule update expected to be finalized in July

Proposed overtime changes could affect millions of business owners

By Vallari Gupte and Lindsey JuarezThe U.S. Department of Labor has pro-

posed a new rule that would extend over-time pay to nearly 5 million additional white-collar salaried workers across the country.

The rule would change the salary threshold for those exempt from receiv-ing overtime pay from $23,660 or more per year to $50,440 or more. The DOL is expected to make a final decision on the rule by July and implement the new laws within a 60-day period.

Those familiar with the proposed rule say it has the potential to help employ-ees and hurt businesses. The DOL esti-mates 4.6 million employees currently exempt from overtime pay would receive

mandatory overtime pay under the pro-posed rule, which the department argues would help workers get fair compensa-tion for their work. In addition, employ-ers would hire part-time workers to take over any extra hours that current full-time exempt employees were working, said Ross Eisenbrey, Economic Policy Institute vice president and DOL expert.

“You can estimate safely that there will be hundreds of thousands of jobs created,” he said.

On the other hand, the U.S. Chamber of Commerce predicts businesses—espe-cially small and mid-size businesses—would struggle to absorb the increased salaries and litigation costs. The National

See Overtime | 18

Cities assess, plan for future athletic space needsBy Kelley Crimmins

The cities of Plano, Frisco, McKinney, Allen and Richardson are conducting a regional athletics study to assess their amenities and forecast needs as the North Texas region continues to have high volumes of population growth.

The study, which is expected to be completed by the end of the year, is the first of its kind and has allowed the cities

to work together to meet the demand for outdoor sports, such as soccer, foot-ball, softball and baseball. The study also aims to help the cities adapt their parks and athletic fields to the changing demographics of the region.

The idea of conducting such a study has been suggested for several years, Plano Athletic Superintendent Ed Voss said. While Plano was fortunate to have

planned well enough to take its parks facilities into the 21st Century, younger cities like McKinney and Frisco are striving to expand their facilities with challenges, such as increasing land and construction costs, Voss said.

“Some of that land [in Plano] was bought very cheaply,” Voss said. “We were able to build a formula at that

See Plano sports | 20

OVERTIMEThe U.S. Department of Labor proposed changing the salary threshold for employees receiving overtime pay. It is expected to publish the final changes in July.

Designed by Aubrey CadeEffect of proposed rule

Approximately

4.6 million full-time, salaried workers would be affected by the proposed rule.

UNITED STATESEFFECTS OF PROPOSED RULE

TEXAS 400,000 workersin Texas would be affected by

the proposed rule.

PROPOSED THRESHOLD $50,440

CURRENT THRESHOLD $23,660

Sources: U.S. Department of Labor, Plano Chamber of Commerce/Community Impact Newspaper

Cricket has grown in popularity in Plano and surrounding cities over the past decade.

Co

urte

sy c

ity

of P

lano

PayrollChange payment structure for hourly and salaried employees.

HiringConsider hiring more part-time workers to reduce overtime pay.

AdviceResearch the rules and seek human resource counseling.

PLANNING AHEADHow to prepare for possible labor law changes:

Community Impact Newspaper • communityimpact.com18

Timeline key: Overtime salary threshold (salaries below this level qualify for mandatory overtime pay)

Poverty threshold (family of four) Poverty threshold (one person)

Period in which the salary threshold falls below the poverty level for a family of four

DOL H

ISTOR

ICAL E

VENT

S

1970196019501940

Photos courtesy U.S. Department of Labor

1938: The Fair Labor Standards Act passes. The act establishes the standard 40-hour workweek, classifies overtime pay and minimum wage, and sets in place child labor laws.

1913: President William Taft establishes The U.S. Department of Labor.

1963: The Equal Pay Act of 1963 passes. The act guarantees equal pay for equal work for men and women.

1967: The Age Discrimination in Employment Act passes. The act prohibits workplace discrimination based on age.

WAGES OVER TIME The U.S. Department of Labor has updated the overtime pay salary threshold seven times in its history. The salary threshold has twice dipped below the poverty level for a family of four in its history. The poverty level for one person, however, has never gone above the salary threshold. The graph shows the historic salary and poverty levels as well as when the salary threshold fell below the poverty level for a family of four.Designed by Aubrey Cade

Historical salary thresholds

$1,560 per year

$2,600 per year

$5,200 per year

$6,500 per year

$7,800 per year

$10,400 per year1959: The first

year poverty level numbers are available

$2,973

$1,467 $1,539 $1,954

$3,128$3,968

19381913 1949 1958 1959 1963

Year the poverty and/or overtime salary threshold was raised

Retail Federation estimates the pro-posed overtime changes would cost restaurants and retailers between $5 billion and $9 billion per year.

“If [employers] think that paying time and a half for overtime is too expensive, the answer is don’t do it. Don’t work people long hours,” Eisen-brey said. “It’s bad for their families; it’s bad for their productivity; it’s bad for their health. It’s a bad idea.”

Local businessesThe Plano Chamber of Commerce

sent out a survey via email to the city’s business owners seeking their opinions on how the proposed changes might impact local companies. Board Chair-woman Kim Moore said the chamber wanted to take concerns and comments to the U.S. Chamber of Commerce and elected officials to find a suitable

solution for Plano’s employees and business owners.

“There is still a lot of uncertainty about when this might become a real-ity—we just don’t know,” Moore said. “And that’s why being prepared is important. Why businesses being pre-pared is so essential is because you may have really short notice if you are a business owner about when this pro-posed rule may become a reality for your business.”

As an employment lawyer at Stras-burger & Price LLP in Frisco, Moore said she has been asked several ques-tions from business owners wanting to know if the proposed rule would apply to them and if so, how.

Time for change?President Barack Obama in 2014

signed a presidential memorandum directing the DOL to update regu-lations under the Fair Labor Stan-dards Act that define how white-collar

OvertimeContinued from | 1

workers are protected under the min-imum wage and overtime standards. The memorandum instructed the DOL to find ways to modernize and sim-plify the regulations, accordingly, the department proposed changing the sal-ary threshold in 2015.

“The basic rule under the Fair Labor Standards Act is that everybody is entitled to overtime,” Eisenbrey said. “The policy is that people shouldn’t work more than 40 hours a week. If they work over 40 hours a week, they should be paid extra, and that discour-ages employers from working people long hours because they do have to pay extra.”

As it stands, the FLSA guarantees salaried workers a minimum wage and an overtime pay of 1.5 times the reg-ular rate for those working more than 40 hours per week. The minimum sal-ary threshold was last updated in 2004 at $23,660 per year. Salary levels had not been updated prior to that since

1975. The DOL has changed the salary threshold seven times since the imple-mentation of the overtime rules.

The DOL argues the current salary threshold falls below the poverty level for a family of four, which is $24,250 per year. However, the current salary threshold is also nearly $12,000 more than the poverty level for one person.

The DOL also proposes updating the salary level every year to maintain the effectiveness of choosing the 40th per-centile which the department believes is the most simple method.

Effect on businessesMoore said the effect of this salary

level increase would be felt in busi-nesses of varying sizes and also non-profit organizations.

“What you need to do is plan ahead and look at your workforce and deter-mine—is this a situation where you as an employer need to do a time study?” Moore said.

$5,500

Plano Edition • April 2016 19

“There are a lot of workers who don’t like to be classified as nonexempt.”

—Kim Moore, Plano Chamber of Commerce board chairperson

20001980 1990

2016: The DOL is expected to make a final decision on a proposal to update the salary level to the 40th percentile of earnings by July.

1990: The Americans with Disabilities Act passes. The act prohibits workplace discrimination based on a disability.

1970: The Occupational Safety and Health Act passes. The act helps ensure workers’ rights to a safe work place.

2009: The Patient Protection and Affordable Care Act passes. The act aims to decrease the number of uninsured citizens and reduce health care costs.

2014: President Barack Obama directs DOL to update which white-collar workers are protected under the FLSA’s minimum wage and overtime standards.

$13,000 per year

$23,660 per year

$2,724

$9,646

$11,880

$5,500

$19,307

$24,250

Sources: U.S. Department of Labor, U.S. Census Bureau, National Archives and Records Administration/Community Impact Newspaper

20101975 2004 2016

FALLING BELOW:Between 1990 and 2004, the overtime pay salary threshold fell below the poverty level for a family of four. After 2004, it took less than 10 years for the salary threshold to again fall below the poverty level.

$50,440 proposed per year

going to an hourly wage system might be interpreted as a step back from career advancement.

“There are a lot of workers who don’t like to be classified as nonex-empt. It means more than the way in which they are paid,” Moore said. “I think some explanation is going to

be required with the employer com-ing to the employee saying that their job, their value hasn’t changed but the compensa-tion model has to change and explain why.”

There are about 31,000 small busi-

nesses in the Plano area, said Yolanda Garcia Olivarez, regional admin-istrator for the U.S. Small Business Administration. About 63 percent of the net new private sector jobs are created by small businesses, she said.

Olivarez said small business own-ers need to study the proposed rule

not have to go before Congress because it has given the DOL author-ity to regulate policies related to labor. The president and the U.S. Office of Information & Regulatory Affairs may review the final rule prior to it being published. The final set of regu-lations might be published in July by the DOL.

Although the comment period is closed, the Plano Chamber of Com-merce is planning to circulate the sur-vey again to get a sense of challenges facing the Plano business community and find ways in which they might be able to help.

She also said companies should talk to their employees, assess time spent on tasks and determine if mov-ing to hourly pay formats or raising salaries to meet the new proposed threshold would be suitable for both parties. If salaries are to be changed, Moore said it is important to remem-ber that salaries of all employees at dif-ferent levels would also be affected.

Moore said the changes to the over-time pay rules might result in the elimi-nation of some jobs because business owners will have to take into consid-eration the possibility of having to increase salaries at different levels of the workforce.

“[Companies need to know] how that is going to affect essentially the bottom line because the proposed rule, if passed, will have a financial effect,” Moore said.

She said reclassifying employees as hourly workers might affect work-force morale. Many employees have been working under exempt status for a long time and the possibility of

and get expert help regarding restruc-turing their workforce and payroll prior to the rule getting passed. The Collin Small Business Development Center can help businesses improve hiring practices, stay up to date with changes in government regulations and enhance profits. The center is a partnership between the U.S. Small Business Administration, Collin Col-lege and the state of Texas.

“The proposed rule will promote higher take-home pay to better bal-ance the employees’ family and work balance,” she said. “When workers are paid more, they tend to certainly go out and [spend more] in the com-munity.”

The final decisionThe DOL opened a comment

period on the proposed rule from July 6-Sept. 4. During those 60 days, the department received more than 270,000 comments. The DOL must review all of those comments before making a final decision. The proposed rule does

Tell us what you think.

Comment at communityimpact.com