A final Department of Labor (DoL) regulation released May 18 on overtime will likely have a large-scale effect on employers and industries, including retailers and community pharmacies. The final rule, which will take effect on December 1, 2016, doubles the salary threshold—from $23,660 to $47,476 per year—under which most salaried workers are guaranteed overtime.
The final rule, which will take effect on December 1, 2016, doubles the salary threshold—from $23,660 to $47,476 per year—under which most salaried workers are guaranteed overtime.
Employers will have more than six months to prepare and will have an automatic update based on wage growth every three years after that. The final rule will raise the salary level for the first time since 2004, and automatically extend overtime pay protections to over four million workers within the first year of implementation.
The American Pharmacists Association (APhA) expressed concerns to the DoL that the new rules could adversely affect community pharmacies. The concern stems from the fact that practicing physicians—including medical residents—are not entitled to a minimum salary or overtime because they qualify for an exemption for the practice of medicine. According to APhA, pharmacy residents should qualify for the same exemption as medical residents because pharmacists cannot accept a residency until they have completed their PharmD.
In comments to DoL, APhA wrote, “…without enough time to plan for salary increases, community pharmacies as well as small businesses may face budget constraints and some may be forced to discontinue these programs that assist in training pharmacists as clinical care providers.” In addition, pharmacy technicians may be affected by the DoL final rule, depending on their job duties.
The National Retail Federation (NRF) estimates the new threshold will affect about 2.2 million retail and restaurant workers, or 64 percent of salaried employees in the industry. NRF has conducted research that shows expanded overtime could drive up retailers’ payroll costs while limiting workers’ opportunities to move up into management. The group also estimates that thousands of workers could be reclassified as hourly employees instead of salaried workers, and could have their hours cut to 38 hours so employers could avoid paying them overtime.