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The IHRSA Advocate is your guide to knowing and understanding the policies that influence daily health club operations. We analyze the action, so you know when to take your own.

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Entries in Overtime (6)

Tuesday
Sep122017

The Final Decision on the DOL’s Overtime Rule Is...

It’s the moment you’ve all been waiting for. On August 31, a federal judge in Texas struck down the federal overtime rule that would have made more than four million currently exempt employees eligible for overtime pay.

The proposed rule would have required that an employee must have a guaranteed salary of at least $47,476 to qualify as exempt, which is more than double the current minimum salary of $23,660. It was originally scheduled to go into effect on December 1, 2016, before an emergency motion for filed in October halted its implementation.

The recent ruling constitutes a final decision, meaning the existing overtime regulations, including the $23,660 exempt salary threshold (which were last updated in 2004) still apply.

It is possible for the DOL to challenge the final ruling, however this seems unlikely. Secretary of Labor, Alexander Acosta, said he recognizes that the salary threshold needs to be increased (though not as high as the proposed rule would have required) and has sent a request for information on the 2016 overtime rule to the Office of Information and Regulatory Affairs. This request for information marks the first step in determining how to increase the existing exempt salary threshold, while ensuring that it remains reasonable.

If you’d like to submit a comment, the DOL is currently accepting feedback regarding changes to the salary threshold. And, if you have any other questions please contact our advocacy team.

Wednesday
Jul052017

What’s the Latest on the New Federal Overtime Rules?

You might recall that last November, a federal judge in Texas issued a nationwide preliminary injunction blocking implementation of the new federal overtime rules, which were scheduled to take effect on December 1, 2016. This injunction did not constitute a final decision and we have been waiting to hear the latest on where the rules stand. Here’s a two-minute recap of what we know now.

In April, Alexander Acosta was confirmed as the U.S. Labor Secretary for the Trump administration. As the new head of the Labor Department, Acosta will play a key role in making a decision surrounding the new overtime rules.

On June 16, IHRSA, as a member of the Partnership to Protect Workplace Opportunity (PPWO) Management Committee, sent a letter to Secretary Acosta, congratulating him on his confirmation and touching upon prior concerns related to the Obama administration overtime rules—which increased the salary level from $23,660 per year to $47,476 per year. Under current law, most employees must be paid time-and-one-half for all hours worked in excess of 40 hours per week; however, some employers are eligible to classify workers as exempt from overtime pay if the workers are white-collar employees with annualized salaries above a certain salary threshold.

IHRSA is extremely concerned about the overtime rule’s potential costs to health clubs and has been working as a member of the PPWO to find a solution that would lessen the impact of these regulations on businesses.

Last week, another step was taken toward reaching a final decision. The Department of Labor (DOL) sent a request for information (RFI) to the Office of Information and Regulatory Affairs for review. The DOL hopes to use this request to get more information on how to set an appropriate salary level that will determine whether an employee is exempt or nonexempt under the FLSA overtime rules. The RFI may also seek input on other aspects of overtime rules, including whether the salary level should be updated automatically.

The specifics of the RFI have not been published, and we will keep you updated once more information becomes available. The PPWO will be submitting a response to the RFI and willin timeencourage other PPWO members to sign onto the submission.

Also, on June 30, the DOL filed a legal brief asking a federal court to weigh in regarding whether the DOL is allowed to set a threshold salary level to begin withwithout addressing whether the specific salary level advocated by the Obama administration is permissible. Secretary Acosta has said the department may consider raising the salary threshold to close to $30,000 per year.  

We will continue to keep you updated as this issue progresses, but in the meantime please contact our team with any questions you may have.


Tuesday
Mar282017

Feds Are Leaving, but the States Are Coming

Employee Overtime Rules an Example of States Stepping in Where Feds Are Cutting Back 

There is a shift in Washington D.C. With the Republicans controlling the White House and Congress, it is widely expected that the federal government will take a step back from regulating business activities. In fact, the Trump administration has already made rolling back business regulations a top priority. However, where the federal government has started stepping back, you can see states stepping in to fill the void. Employee overtime could be an early example of this emerging trend.  

Under the Obama administration, the Department of Labor (DOL) issued a new overtime rule, which was scheduled to go into effect on December 1, to extend overtime eligibility to an additional 4.2 million workers. Late in November 2016, a federal judge put the overtime rule on hold. Though the DOL appealed the judge’s ruling, President Trump, who does not support the overtime rule, took office before the DOL’s appeal could be heard.

As expected, now under the direction of the Trump administration, the DOL has delayed the implementation of the overtime rule by requesting a 60-day extension until May 1. While the extension request is only a temporary delay, it is expected that the DOL will prevent the Obama overtime rule from ever coming into effect by either refusing to defend the rule in court, or rewriting the rule through a formal rulemaking process. End of story, right? Not quite.

A state senator in Maryland has picked up the overtime fight that the DOL appears ready to abandon. A bill (SB 607) that appears to have been inspired by the DOL overtime rule was filed in the Maryland state senate, proposing changes to the state’s overtime laws. Similar to the DOL rule, SB 607 would add a salary threshold of $47,476 to the determination of whether an employee is eligible for overtime. Meaning, in order for an employee to be exempt from overtime, the employee’s salary would have to be at least $47,476 per year. In addition, the salary threshold would be adjusted every three years based on wage census data published by the DOL.  

Maryland SB 607 failed to be voted out of committee and has been withdrawn from further consideration. However, it illustrates that while you may see less regulation on the federal level, you should not expect that trend to flow down through all the states. In fact, you should expect to see some states become much more assertive in applying their regulatory authority as they perceive the federal government stepping back.

Tuesday
Jan032017

2017 is Comin’ in Hot: Here’s Your Legislative Intelligence Briefing

2017 has arrived.

While you’ve been busy signing up ‘resolutioners’, taking care of current members, optimizing your group-X schedule, and selling training packages, you can rest assured that IHRSA has been just as busy surveying the legislative landscape and prepping for the year ahead. Here’s what you need to know about the most prominent issues and opportunities we expect to see this year.

1. Passing PHIT in the 115th Congress

2017 presents the perfect opportunity for individuals and communities to join the movement to “Get PHIT.”

The Personal Health Investment Today (PHIT) Act would directly benefit your membership roster and revenues by allowing your members to save 20-30% on their fitness expenses—such fitness equipment, youth sports league fees, and health club memberships and services.

This year, there are a few unique circumstances that could serve as added momentum to propel support forand passage ofthe bill forward.

The first opportunity comes in the form of proposed changes to the Affordable Care Act (ACA). With the help of Congress, the Trump administration plans to repeal and replace the ACA, therefore creating more opportunities to expand the use of private health savings accounts (HSAs). On the flip side, an increased emphasis on tax reform creates the second opportunity to pass this legislation.

However, regardless of the political landscape, IHRSA needs help from you—club owners and operators—to actively communicate all the reasons why Congress should pass PHIT. We, as an industry, need you to educate your members about the importance of passing this legislation and encourage them to spread the word about the value that daily exercise provides for both the health of the American people and the stability of the economy. So download the Get PHIT Toolkit and begin rallying your members by explaining how they’ll benefit from PHIT’s passage.

2. Keeping a Watchful Eye on the New Overtime Regulations

On December 1, new FSLA overtime regulations were scheduled to go into effect. These regulations would have extended overtime eligibility to an additional 4.2 million workers, exponentially raising payroll costs to businesses, including health clubs.

Even though a November 22 ruling prevented the implementation of the new rules as a result of a preliminary injunction, the fight to prevent implementation of the rules is far from over. The preliminary injunction upholds the current overtime regulations, but does not constitute a final ruling.

The opportunity for Congressional review of the new rules is still in play for 2017. Right now, the federal government has appealed the preliminary injunction to the 5th Circuit Court of Appeals and this motion has been granted. Under this appeal, final opposing briefs will be due on January 31 with oral arguments to follow. Therefore, it is not anticipated that any changes in the regulations will be seen until February or later.

Regardless of the Congressional review, a decision will have to be made by the new administration on whether or not to continue with the appeal or let the injunction stand.

IHRSA will continue to provide you with additional updates as more information becomes available.

3. Monitoring State Legislation for Issues Impacting Health Clubs  

While federal legislation (like PHIT and Federal Overtime Law) may receive the most media attention, it is important to note that all politics is local. And while federal legislation usually moves at a glacial pace, legislation at the state level moves so quickly that it can often hit without warning. That is, unless you’re an IHRSA member, because our team acts as your early warning system.

You’ve probably heard the phrase ‘do-nothing Congress,’ but recently the state of Colorado passed 63% of the bills proposed. And, in terms of the volume of bills introduced, New York (an average of 12,389 bills per session), Illinois (6,002) and Massachusetts (3,973) introduce the most. Because of this high volume of introduced bills, it can be difficult to stay on top of breaking legislative developments while keeping up with the daily responsibilities of running your business.

In 2017, the IHRSA team anticipates seeing and fighting against a number of issues at the state level which include but are not limited to sales tax proposals, locker room privacy & security issues, and consumer protection laws impacting health clubs.

To view a more detailed summary of the issues we predict will be seen in your state this year, look for IHRSA’s 2016 Advocacy Impact Report which will be released in the coming weeks. In the meantime, be sure to monitor the latest updates in your state, and if you have not already done so, sign up to receive IHRSA’s legislative alerts by emailing gr@ihrsa.org.

Tuesday
Oct252016

Team IHRSA Steps up to Defend the Industry in October 

It’s hard to believe that it’s already the end of October, and with election season right around the corner, it is important to consider all the current legislative issues at play that could impact your daily health club operations—in addition to the ones that could emerge in the future.

In October, IHRSA worked diligently to eliminate all of the following legislative roadblocks that could have significantly impacted your daily business operations if they had gone undetected:

Overtime regulations - The new federal overtime rule is scheduled to go into effect on December 1. This new rule would grant overtime eligibility to more than 4 million workers—who have a salary of $47,476—as exempt from overtime rules under the executive, administrative, or professional exemptions.

Unfortunately, this new rule could be costly for clubs, and it does not give businesses an adequate amount of time to comply with the new regulations. IHRSA joined the Partnership to Protect Workplace Opportunity (PPWO)—an organization that is committed to protecting the economic interests of businesses and individuals—in order to delay implementation of the new rules. In addition, IHRSA supported the PPWO in encouraging the Senate to pass Senate Bill 3462 (SB 3462)—which would delay implementation of the overtime rule until June 1, 2017. We will continue to keep you updated as more details become available.

Sales tax expansions - Often times, legislatures propose a tax on health clubs when they are in need of an alternative revenue stream or are under pressure to resolve a budget deficit or finance a new legislative priority.

However, legislators should be encouraging physical activity and its benefits—which include lower healthcare costs, a healthier population, and stronger economic stability.

IHRSA has continually lobbied against the expansion of the sales tax in Pennsylvania. At the beginning of the month, another legislative proposal to expand the sales tax to consumer purchases—like health club memberships—was introduced.

Due to the lack of days remaining in the state legislative calendar, House Bill 76 (HB 76), which would have expanded the sales tax to health club memberships and increased the state sales tax from 6 to 7 percent, is no longer a threat for the remainder of this year. However, this is an issue IHRSA will once again be closely monitoring in 2017.

Automatic renewal provisions - IHRSA supports automatic renewal provisions that allow for contract continuation at the end of the original term on a month-to-month, at-will basis. Provisions that allow for automatic renewal offer consumers the greatest choice and flexibility because clubs are not forced to sell long term contracts to avoid the costly process of renewing existing members.

Unfortunately, automatic renewal is once again an issue IHRSA is fighting in New Jersey. Assembly Bill 2450 (AB 2450) would establish standards for contracts containing an automatic renewal clause, as long as the renewal exceeds a period of one month and the original contact lasted a minimum of 12 months. The legislation passed the Assembly and is awaiting consideration in the Senate. Because the bill requires electronic or written notification, IHRSA is making legislators aware of the negative impact that the bill’s passage would have on New Jersey health clubs and their members.

Sales tax repeals - In addition to our efforts to prevent the expansion of a state sales tax to health club dues and services, IHRSA also looks for opportunities to repeal existing sales tax provisions that create barriers to healthy behaviors.

In September 2015, the Ohio Senate introduced a bill that would exempt health club memberships from the 5.75 percent sales tax if the health club facility had filed a 501(c)3 tax-exempt status with the IRS. House Bill 334 (HB 334) passed the House in May and is currently being considered by the Senate Ways and Means Committee.

Right now, for-profit and nonprofit health clubs in Ohio are subject to the tax. Although the legislation would remove the tax from nonprofit facilities, it would leave the tax on services provided by a for-profit club. IHRSA opposes taxing health club memberships at any facility, as they would discourage people from being regularly active. We will continue to fight for legislation that encourages healthy lifestyles and makes physical activity affordable and accessible for everyone.

Additional resources:

Tuesday
Oct112016

Overtime Regulations December Deadline Looms

Efforts to Delay in Congress, Courts

On December 1, the new federal overtime rule is scheduled to go into effect, estimated to extend overtime eligibility to more than 4 million workers. Under the new rule, an employee must have a guaranteed salary of $47,476 or more to qualify as exempt from overtime rules under the executive, administrative, or professional exemptions. That’s more than double the current minimum salary level of $23,660.
 
IHRSA is concerned about the potential costs to health clubs posed by the overtime rule and about the short time frame for businesses to prepare for compliance. Therefore, IHRSA has joined the Partnership to Protect Workplace Opportunity (PPWO), a diverse group of businesses and associations advocating that regulations take into account the economic realities facing businesses.
 
Potential Congressional relief. On September 28, the House of Representatives passed H.R. 6094 “Regulatory Relief for Small Business, Schools, and Nonprofits Act.” This bill would delay the implementation of the overtime rule for 6 months until June 1, 2017. A related bill, S. 3462, was introduced into the Senate on September 29. The Senate must pass this measure either before they adjourn for the election or in a possible lame duck session that could be held after the election. IHRSA will be joining the other members of the PPWO in asking the Senate to pass S. 3462.
 
Potential legal relief. In addition to the legislative effort, a lawsuit has been filed by fifty-five business groups seeking to stop the implementation of the overtime rules. And, twenty-one states are jointly filing a case against implementation.
 
IHRSA discussed this issues in both May and July and we will keep you informed of any new developments as they emerge. In the meantime, if you have questions or concerns, please email IHRSA’s public policy team at gr@ihrsa.org