Labor urges compliance with new OT rules

The Department of Labor is waiving the $25 contract amendment fee for employers seeking to comply with the new federal overtime rules.

Labor director Dean O. Tenorio said a number of employers have been coming to the Division of Labor to adjust their employment contracts with workers before the new FairPay rules took effect on Aug. 23.

The new federal rules guarantee overtime protection for workers earning less than $23,660 per year. This means that all employers are required to give time-and-a-half overtime pay to all workers with salaries of $455 or less per week.

The old threshold for overtime pay exemption was $155 a week for executive and administrative, and $170 a week or more for professional workers.

“I don’t see compliance to these new rules as an issue yet, as a lot of employers have been coming to adjust their contracts,” Tenorio said, as he urged other employers who have not made the necessary changes to comply with the new federal rules.

Tenorio added that the division is not charging employers for contract amendments made for the purpose of complying with the overtime policy. Under the new Alien Labor Rules and Regulations, which became effective on Aug. 6, a request for an amendment costs $25 per contract.

“An amendment under this type of situation is not a voluntary act. So if employers want to adjust to comply with the law, we would not impose the $25 charge. We’re trying to encourage compliance. We don’t want people to not come in because there’s a fee,” Tenorio said.

Although compliance to the new rules is more of a federal enforcement issue, the Division of Labor is looking forward to working with U.S. Department of Labor on the implementation of the rules, Tenorio added.

Recently, the division sent two of its supervisors for training on the new overtime rules, so they would become more aware of what to look for when reviewing employment contracts.

Tenorio also expressed his desire to conduct a joint public education campaign with federal labor representatives on the islands regarding the many changes in labor rules.

With the effectivity of the new overtime rules on Aug, 23, eligible workers may now file complaints against employers who do not pay for overtime work.

Complaints, Tenorio said, may be filed with either the Federal Ombudsman’s Office or the CNMI Department of Labor. He, however, said that the federal office may be quicker to respond, given the huge volume of complaints already being filed with the local Labor Department.

The newly adopted federal regulations on overtime pay give employers the option to either pay workers $455 a week or keep them at their present salary level but entitle them to receive overtime pay for work done beyond the regular 40-hour period.

The weekly rate is determined by multiplying the current monthly pay by 12 months and dividing it by 52 weeks. This covers 40 hours of work time a week.

Anything that exceeds 40 hours must be compensated and is treated as overtime, which is “a rate not less than one and a half times the regular rate.” Any contract that would provide for more than 40 hours without overtime pay is a violation of the rules.