Opposition to the Department of Labor’s proposed overtime rule has been running high from the beginning, not just from employers but employees, too.
The House Committee on Small Businesses certainly heard that message loud and clear after convening a hearing recently on the “Consequences of the DOL’s One-Size-Fits-All Overtime Rules for Small Businesses and their Employees.”
The question at the heart of the debate: would stripping away exemptions currently in place for certain worker classes hurt businesses and their workers?
Kevin Settles, speaking on behalf of the National Restaurant Associates, told the lawmakers that the new regulations would force owners to put everyone on an hourly wage.
“While … an easy transition to make … it [would] remove the certainty of a fixed paycheck,” Settles said.
The change could also hurt employers’ support for training programs and cut back on room for advancement, he said.
Terry W. Shea, speaking on behalf of the National Retail Federation, also criticized the proposed regulations. “If the new salary threshold takes effect, we will be forced to convert all salaried management to an hourly wage,” she said.
That might cut into benefits and job security. “This new overtime rule,” said Shea, “is bad for employees … and for small-business owners.”
Under the proposed regulations, salaried workers earning less than $50,440 will be eligible for overtime pay. The rules would more than double the previous salary threshold for overtime-eligible workers, sweeping in some managers and supervisors.
Just when the rules would be completed or implemented is unclear, though nothing is expected to change until 2016.
A survey of 413 members of the Society for Human Resource Management found that 67% of respondents said that employees would have decreased autonomy and flexibility as a result of the rule. Also, 70% said their firms would likely offer fewer opportunities than before to work overtime, because of cost concerns.
Some 900 SHRM members have submitted comments to the DOL objecting to the proposals. The agency, in fact, has been flooded with comments — roughly a quarter of a million — from employers looking to get their two cents in on the proposed rule change.
SHRM has said the changes will not only burden management but be a detriment to the workers they intend to help.
SHRM asserts that many workers who currently earn below the proposed threshold would not all of a sudden begin making more money if the changes are implemented. Instead, the HR organization predicts that employers will impose stricter work hours in order to limit overtime. The result, it says, would be “reduced workplace flexibility and access to opportunities to gain experience” as well as a “loss of professional status.”