Butler County leaders find ways to limit costs from new OT rules

Commissioner complains about federal mandates.

A Butler County department that once thought a new federal rule making more workers eligible for overtime would cost it $250,000 next year now expects the change to cost a fraction of the original estimate.

Butler County Finance Director Tawana Keels had cautioned commissioners the so-called “white collar” rule could put a dent in spending plans as departments prepared 2017 budgets.

However, “Departments and agencies developed strategies to reduce the impact of the FLSA overtime rules on the bottom line through time studies, the use of comp time and reducing overtime hours worked,” Keels said. “These strategies helped to control growth due to federal mandates.”

Keels said a total 115 individuals — of an estimated 2,100 county employees — were impacted by the new rule, and she is pleased with how county officials handled the Federal Labor Standards Act (FLSA) changes.

Currently, workers making as little as $23,660 a year can be exempt from making overtime. The Obama administration is bumping that threshold to nearly $47,500 a year with the aim of extending overtime eligibility to middle managers, according to the U.S. Department of Labor. The rule takes effect Dec. 1.

Keels said this only applies to people in executive, administrative, professional and computer positions, not all county employees in that salary range.

Only the Board of Developmental Disabilities actually took a bit of a hit, but not nearly as hard as predicted a year ago.

That department estimated the rule would cost it $250,000 for about 75 employees who would move to hourly wages eligible for overtime. For next year the overtime prediction is now down to $30,000 for 97 employees, according to Finance Director Hailey Quinn.

“We’ve been really active with our staff and time studies to see what type of overtime they are truly, truly realizing since they are salaried staff,” she said. “With that time study we’ve been able to change the way people were doing work and increase our efficiencies.”

Keels had asked the office holders and department heads to indicate in their budgets if the white collar rule would be an issue. Only a handful of offices and agencies said they had anyone who would be eligible, and just about everyone but Chuck Demidovich, administrator at the Butler County Care Facility, said those who qualify don’t usually work overtime.

Demidovich has five supervisors impacted; two will be classified as non-exempt because they are “not even close to the salary threshold” and three others got raises in the $500 to $1,500 range to take them over the threshold.

“It wasn’t a big number,” he said of the impact to his budget.

Since 1938, the federal Fair Labor Standards Act has required employers to pay workers a time-and-a-half rate for hours worked in excess of 40 in a week. In 1975, nearly two-thirds of full-time salaried workers were eligible for overtime pay but now the vast majority do not qualify because the salary threshold has only been updated twice in the past four decades, according to the White House.

Commissioner T.C. Rogers said while the new rule didn’t hurt county government per se, that doesn’t mean it isn’t detrimental.

“Yes it did come out (alright) for us, but I know of several other of our small businesses across the county, this is going to have a tremendous impact,” he said. “It’s another example of federal rule-makers making rules on an industry that they’ve never worked in.”