Proposed Overtime Regs Will Do More Harm Than Good

Here’s why

On Sept. 4, the Society for Human Resource Management submitted final comments to the U.S. Department of Labor (DOL) on their proposed overtime regulations. SHRM’s state partners were very engaged on this issue, resulting in 50 SHRM state councils and 307 chapters, as well as a SHRM strategic affiliate: the Council for Global Immigration: signing onto the comment letter.

In addition, through a special Web portal, individual SHRM members sent 828 letters to the DOL and 2,072 letters to members of Congress expressing their unique concerns about the proposed regulation and sharing personal testimonials of how these regulatory changes would impact the HR profession, employers, and employees in their local areas.

Click here for the final comment letter.

Key concerns expressed in the comments include:

• The proposed salary threshold ($970/week or $50,440/year in 2016) is an increase of more than 100% of the current threshold and is so high that it will have a significant impact on nearly every workplace.
• The DOL improperly based the new threshold on the 40^th percentile of earnings for full-time salaried employees, a complete departure from the methodology used since the law was enacted.
• The new threshold will cause many workplaces to be required to move employees that perform clearly-exempt duties, such as management, to hourly employees required to track their time. This change will reduce employee access to workplace flexibility, will cause employers to place strict limits on overtime hours, and may cause some employers to restructure their workforces to move full-time to part-time jobs.
• The new threshold will have more pronounced negative effects on employers in areas of the country with lower standards of living and the nonprofit industry, where SHRM members working within nonprofits have indicated they will need to cut services.
• The DOL’s proposal for automatic annual increases to the salary threshold will result in wage compression and difficulties maintaining meaningful systems for merit increases.
• The DOL’s proposed regulation does not make specific changes to the duties test but asks for input on whether the duties test should be updated. SHRM points out that if the DOL decides to make changes to the duties tests, we believe they are legally required to publish those changes for public notice and comment.

SHRM also led the employer community response with Lisa Horn, director of congressional affairs, serving as chair of the Partnership to Protect Workplace Opportunity. The Partnership submitted comments, available here, and was joined by 133 employer groups as co-signers.

If you have any questions regarding SHRM’s member engagement or advocacy efforts, please contact Meredith Nethercutt at Meredith.Nethercutt@shrm.org