Businesses: Dead OT rule still a bad idea

Written on Sep 28, 2017

OSCPA staff report

The Department of Labor this summer asked for information on an Obama-era rule for overtime pay, as well as thoughts for going forward. Desired feedback is on the way, though the original proposal is essentially dead.

A Texas judge on Sept. 7 struck down the Obama Administration’s rule, which would have doubled the minimum salary threshold for overtime pay for some workers who put in more than 40 hours per week. The DOL’s Request for Information on overtime regulations was published earlier this summer in the Federal Register and asked for thoughts on both the original proposal and ideas on what should be considered going forward.

OSCPA and more than 400 U.S. organizations in the Partnership to Protect Workplace Opportunity had argued from the start that the DOL rule was a bad idea that would hurt employers and workers alike. The coalition on Sept. 25 took the opportunity to add a shovelful of dirt on that proposed rule, as well as additional thoughts, in the form of a comment letter (PDF).

The group said the “rule’s salary level created (or was expected to create) significant additional costs, and disruptions in operations, often resulting in identical pay to an employee for identical hours worked, but with dramatic increases in costs for an employer to monitor and ensure compliance.”

The Request for Information included questions about the role the duties test plays with respect to the salary threshold, what is the proper methodology, and whether there should be multiple salary levels to reflect different regional economies, sizes of employers and exemptions. The comment period is 60 days.

The PPWO and OSCPA said it thinks “employees and employers alike are best served with a system that promotes maximum flexibility in structuring employee hours, career advancement opportunities for employees, and clarity for employers when classifying employees.”

The rule  was initially halted in November 2016 by a court decision days before it was to go into effect. It would have doubled the minimum salary threshold for overtime pay from $23,660 to $47,476 annually and raised the exemption level for what are considered “highly compensated employees” from $100,000 to $134,004 annual salary.

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