News & Information

Advocacy helped halt potentially harmful overtime regulation

by Christine Henzig, Director of Communications Sep 07, 2017

A federal court has permanently blocked a rule that your League and the Credit Union National Association (CUNA) have said would likely have harmful consequences for credit unions and their employees.

What the rule would have done

The  Overtime rule, first proposed in 2015 by the Department of Labor, was set to go into effect December 1. It would have increased the threshold for eligibility for overtime pay by more than twice the current rate, moving the cut-off up to $47,476 from the current $23,660.

Potential negative repercussions

We shared with the Department of Labor that this change would have had unintended negative consequences for credit unions, particularly smaller credit unions and those in rural areas. We warned the agency that the new overtime threshold could require credit unions to:

  • Raise salaries for particular employees to remain exempt
  • Lay off employees to fund the increase in wages for retained employees
  • Lower the hourly wages of non-exempt employees
  • Cut services to save costs; and/or
  • Restrict overtime hours worked by non-exempt employees (an impractical step for non-exempt management employees).

The action by the court makes permanent a temporary injunction from last December that stopped the Department of Labor from enforcing the rule. The DOL could decide whether to appeal the permanent injunction, propose new rules, or take some other course.

Advocacy sounded the alarm

The League and CUNA shared these concerns and others as part of the comment process.

CUNA also wrote to the National Credit Union Administration to seek relief for credit unions that would be disproportionately impacted and shared concerns with the Small Business Administration's Office of Advocacy.

Our system also supported legislation and sent letters to Congress seeking reforms to the rule.

Questions?

Contact Paul Guttormsson, VP Legal & Compliance, at (262) 408-6009.  


Wisconsin credit unions come together as a single League to Unite for Good; we remove barriers, increase awareness and foster service excellence. All of these steps help more Americans to see credit unions as their best financial partner and regard their credit union as their primary financial institution. Read more articles in our Unite for Good series.