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MCUA Submits Comment on DOL's Proposed Overtime Rule

On September 4, 2015, the Missouri Credit Union Association (MCUA) filed comments with the Department of Labor (DOL) concerning a proposed rule which would raise the salary threshold for overtime eligibility. The proposed rule would raise the salary threshold for overtime eligibility, from $455 a week ($23,660 a year) to a projected level of $970 a week ($50,440 a year) by 2016. The proposal would also establish a mechanism for automatically updating the minimum salary and compensation levels in the future.

MCUA supports the DOL’s concept that employees should be fairly compensated, and works to provide programs and education to help credit unions develop a positive culture that ensures opportunities for growth and development among their employees. Despite good intentions, MCUA believes the DOL’s proposed changes for the exemption threshold for overtime pay are too extreme and will ultimately not achieve a better situation for many employees. Increasing the threshold for overtime pay by more than twice the previous threshold does not accurately reflect the proportional change in salaries since the last rulemaking. Furthermore, in the case of credit unions, the rule does not consider the difficult regulatory environment that has increased costs in other areas exponentially over the past few years. Accordingly, it would be extremely difficult for credit unions to find the extra resources to come into compliance with this rule, as opposed to if the DOL took a more incremental and measured approach to modifying the standards.

MCUA also has concerns that this overly broad proposed rule, which sweeps in nearly 5 million more people and thousands of credit union employees, will have unintended consequences. Ultimately, it could negatively affect many credit unions, their members, and their employees—even those within the salary range the increase aims to help. Particularly, it could cause problems for credit unions outside of large metropolitan areas where the average salary is significantly different from the average salary at the national level, which the DOL has relied on. 

To read MCUA's entire comment letter, click here.