The Native American Financial Officers Association hosted its fall finance and tribal economies conference in Boston, Massachusetts, in September 2015. Photo from Facebook
The Obama administration has finalized new overtime pay standards that tribes say will hurt their enterprises and force them to take resources away from critical programs. The rule goes into effect on December 1, giving employers more than six months to prepare for changes that will boost overtime wages for millions of workers. But even though tribes across the nation raised serious questions about the proposal, the Department of Labor concluded that it won't have a "substantial" impact on Indian Country. The department in fact declined to recognize the unique economic situations faced by tribes and their enterprises. Tribes across the nation noted that they can't always compete with other employers due to their rural locations. Changing the threshold for overtime pay puts them at a disadvantage in comparison to commercial entities, they argued. Tribes also complained of inadequate consultation. The department insisted that it reached out to the National Congress of American Indians, the largest inter-tribal organization, and hosted listening sessions that drew tribal representatives, but no information about the rule's impact is being provided to tribal governments. In contrast, guidance has been offered to states and local governments and other employers. As a result, the Native American Finance Officers Association is urging tribes to take a careful look at their budgets and programs in the next six months. Tribes might be able to change the classifications of some employees, adjust timekeeping methods or offer more "comp" time in order to prevent their operations from taking a hit in December. Tribes could also raise salaries for workers so that they won't be affected by the new rule. But the threshold has been increased considerably -- and it will continue to increase every three years -- so that won't be a viable option for everyone.
Department of Labor on YouTube: OVERTIME: It’s about time
"Tribal employers should analyze any new economic development projects and existing budgets that will be effected by the added salary expense," NAFOA said in a broadcast on Wednesday. "Many tribal programs have not budgeted for the increased expense and do not have the resources to increase salaries above the overtime threshold." "NAFOA predicts social programs may be hit the hardest," the organization continued. "Your tribe may want to re-evaluate contributions from enterprises and other revenues to support the added salary expense." NAFOA urged tribes to submit comments to the proposed rule after it was released last July. Indian Country heeded that call and expressed unanimous opposition to the changes. The Elk Valley Rancheria of California and the Jamestown S’Klallam Tribe in Washington, for example, said the salary threshold -- which went from $23,660 to $47,476 per year under the new rule -- is too high for rural and small communities. The department did lower the threshold from the original figure of $50,440 but otherwise declined to recognize the unique challenges that tribes face in recruiting and retaining employees. "We believe that this adjustment will provide relief for state, local, and tribal government employers, as it does for employers in low-wage areas and industries," the department wrote in a notice that will be published in the Federal Register next week. The Gila River Indian Community in Arizona and the Ute Mountain Ute Tribe of Colorado also sought formal government-to-government consultation to address specific employment issues on and near reservations. But that suggestion was rejected, with the department again lumping Indian Country into the same category as other businesses. "The department did not propose special treatment for small businesses, tribal governments, or other entities, and did not request comment on these issues," the forthcoming notice reads.
President Barack Obama meets with tribal leader at the White House on December 2014. Photo by Pete Souza / White House
According to the department, more than 4.2 million workers will benefit by the new rule. They will be entitled to overtime pay as long their salaries fall under the $47,476 threshold, which is basically double the amount of the prior threshold of $23,660 per year. "If you work more than 40 hours a week, you should get paid for it or get extra time off to spend with your family and loved ones," President Barack Obama said in an email to signers of a petition that supported the changes. The department offered a state-by-state map that estimates how many workers will benefit but it does not include information about tribes. Native American employees aren't listed in data about those who are affected either. The department is also offering suggestions similar to those made by NAFOA. Employers can increase salaries above the threshold, limit overtime hours and evaluate and realign workloads. But even though the threshold was lowered from amount in last year's proposal, the automatic increases every three years will put it over that level in 2020. The Fair Labor Standards Act,which guides overtime pay, does not specifically mention tribes as employers. But the federal courts have subjected tribes and their enterprises, along with businesses on reservations, to the law in some but not all instances. Forthcoming Federal Register Notices:
Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees (To Be Published May 23, 2016)
Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees; Announcement of Time-Limited Non- Enforcement Policy for Providers of Medicaid-funded Services for Individuals with Intellectual or Developmental Disabilities in Residential Homes and Facilities with 15 or Fewer Beds (To Be Published May 23, 2016)
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