On June 30, 2015, the Department of Labor (DOL) released a proposal to update the Fair Labor Standards Act’s (FLSA’s) overtime rules. These proposed changes would increase the number of workers who qualify for overtime pay by modifying the FLSA’s overtime exemptions and increasing the minimum salary for those that are exempt. The DOL is expected to finalize the rule in late 2016.
Last month the Partnership to Protect Workplace Opportunity, a coalition of employer groups that includes a diverse collection of associations, businesses and other stakeholders representing employers across the country and in almost every industry, sent a letter of opposition to Congress. The letter was signed by many national and state associations, including the Ohio Society of CPAs and many other societies.
The letter reads, “The magnitude of DOL’s proposal, coupled with the annualized automatic increases with no feedback from employers, and the changes to the duties test that DOL is considering, threaten businesses, employees, non-profits, state and local governments, and the economy as a whole. According to the Department’s own estimate, as a result of the minimum salary increase more than four million employees will need to be reclassified from exempt/salaried to nonexempt/hourly and the rule will affect over ten million workers; that is more than the populations of Maine, New Hampshire, Rhode Island, Montana, South Dakota, Alaska, North Dakota, Vermont, Washington and Wyoming combined.”
The letter goes further to say, “The millions of employees converted from exempt to nonexempt status would lose the flexibility that they currently enjoy and have fewer opportunities for career advancement. Hourly employees are not guaranteed any fixed weekly pay—like salaried employees—or guaranteed any specific hours.”
The letter concludes for Congress representatives to contact the DOL, Office of Management and Budget’s Office of Information and Regulatory Affairs, and other officials within the Administration and urge them to reconsider this rule.
Even though disagreement is increasing, all organizations should, however, analyze the impact these changes will have on their businesses.