HR decisionmakers ponder impacts from proposed wage increase to Fair Labor Standards Act

A proposed change to federal policy governing salaried staffers could have sweeping impacts on our local island economy. The Fair Labor Standards Act, the policy dictating working conditions for the US and its territories, could soon require that employees exempt from overtime receive a substantial increase to their pay.

Mary Rhodes, president of the Guam Hotel & Restaurant Association, spoke to KUAM News and speculated on the impacts to local organizations at today's meeting of the Society of Human Resource Management. She said, "This will affect all industries, large and small, regardless of sector, so it really impacts everybody. What that would do would be to increase the wage from its current status of $23,000 up to $55,000, which is about a 133% increase. USDOL has the right to implement that within 60 days, so that could happen as early as January."

Rhodes continued, "I think hiring freezes are absolutely going to happen because [organizations] are going to have to look internally within their operations to look at how thy handle things organizationally with their staff who are currently exempt, whether they have to shift employees from exempt status to non-exempt status, and how that would impact operations and staff scheduled and how they would look at new hires."

Guam has received exemptions in the past, and local leaders are seeking a similar status update should the Act adopt the modification.