Biden Administration Finalizes Two Significant Rules Affecting Members

Two specific rules were recently finalized that may affect lighting manufacturers and retailers, according to a recent update released by ALA's Vice President of Public Policy Michael Weems.

Department of Labor Rule
The first is from the Department of Labor (DOL) and establishes new overtime salary thresholds starting this summer. Specifically, DOL issued the long-overdue rule on overtime pay, amending the Fair Labor Standards Act to provide protection to more than 4 million American workers.

The final rule regarding new overtime salary thresholds will have two phases — the first on July 1, 2024, and the second on Jan. 1, 2025. After that date, overtime salary thresholds will be automatically updated every three years.

What ALA members need to know: Effective July 1, 2024, the overtime salary threshold will be $844 per week (the equivalent of $43,888 per year for a full-time, full-year employee) and effective Jan. 1, 2025, the overtime salary threshold will be raised to $1,128 per week (the equivalent of $58,656 per year for a full-time, full-year employee). The final rule is expected to cost $1.5 billion in the first full year of 2025.

These increases are more than a 60% increase over the current overtime salary threshold. For reference, the current overtime salary threshold is $684 per week (the equivalent of $35,568 per year for a full-time, full-year employee).

Business groups are expected to sue to block the rule from going into effect, warning the outcomes of the rule will be highly disruptive to the economy and employers’ overhead costs. Additionally, the automatic updates are expected to outpace the rate of inflation. At the urging of ALA’s retail members, ALA submitted comments in opposition to DOL’s proposal.

Overtime pay protections are automatic for hourly based employees, ensuring those that put in more than 40 hours a week get paid 1.5 times their regular pay for the extra hours they work. Salaried employees receive overtime only if they earn below a certain salary ($684 per week). Employees above that level are considered “exempt” from overtime pay protection and are typically classified as executive, administrative, or professional employees.

Department of Energy Rule
The second rule that was recently finalized comes from the Department of Energy (DOE) and concerns new efficiency standards for general service lamps (GSL). This rule will also impact both lighting manufacturers and retailers.

DOE’s new rule increases the energy-efficiency standards for most general service lamps. Instead of a single efficiency requirement, the new rule has established a range of efficiency requirements based on lamp type and lumen output. The range is 83-195 lumens per watt (LPW). This is a significant increase over the backstop that imposed 45 LPW. The new standards apply to all products, in scope, that are manufactured or imported into the United States beginning July 25, 2028.

Fortunately for retailers, the new rule is unlike the backstop, as retailers will be permitted to sell through existing inventories.

The new DOE rule maintains the GSL definition and exemptions, however, when clarifying the scope of the new rule, DOE made minor tweaks to the supporting definitions for LED downlight retrofit kits, reflector lamps and showcase lamps, but did not amend the definition for Standby mode. Circadian-friendly Integrated LEDs are also included in the scope of the new rule.

DOE has provided the following table to show the efficacy equations for the products in scope of the new rule:

DOE acknowledges that not all GSLs are subject to the amended standards in the new rule. Furthermore, DOE has forecasted that future rulemakings may be necessary to address these products. In the meantime, there are several products in today’s marketplace that can meet the new standards and, in the years, leading up to the 2028 compliance date, ALA’s manufacturers will continue to develop and bring more efficient products to market.

ALA continually researches any proposed government action that may affect lighting manufacturers, retailers, manufacturers’ representatives and designers. This vigilance allows ALA to engage various government entities in order to better represent the  lighting industry’s perspective and share the potential impact on member companies before any rulings are finalized. ALA’s monitoring has and response efforts have already successfully modified proposed rulings to lessen their impact on ALA’s membership.