Today’s revision to overtime regulations for white collar workers by the Department of Labor was a disappointment to the National Association of Electrical Distributors.
“NAED represents companies in a wide spectrum of sizes—from small and mid-sized independents to large regional and national chains. Our members and national organization strongly oppose the new Department of Labor rules,” said Ed Orlet, Vice President of Government Affairs. “Today’s workers value flexibility and opportunity for growth. The Department’s proposal ignores the rapidly changing workplace and will not serve to improve workplace conditions for employees or employers. While an increase to the salary threshold is due, the magnitude proposed by DOL will hurt small businesses.”
The new rule changes the Fair Labor Standards Act by:
- Raising the threshold under which most salaried employees are guaranteed overtime $47,476 ($913 per week)
- Automatically update the salary threshold every three years; the increase will be based on the 40th percentile of full-time salaried workers in the region in which the salary level is lowest
- The rule will go into effect December 1, 2016
The salary increase would more than double the current overtime salary requirement and require businesses to reclassify workers as “non-exempt,” resulting in less autonomy and reduce opportunities for advancement. Employees below the new salary requirement would be required to track hours, increasing compliance time, and reduce employees self-imposed time management.
NAED supports the Protecting Workplace Advancement and Opportunity Act introduced by Senator Tim Scott and Congressman Tim Walberg. The bill would require the Secretary of Labor to nullify the rule and do an in-depth economic analysis before a similar rule can be promulgated. The legislation requires DOL to conduct an economic analysis on:
- the economic impact on small businesses, nonprofits, institutions of higher education, and other affected parties;
- the management and human resources costs, such as costs associated with reclassifying employees and extra hours spent scheduling employees; and
- the impact on employment, workplace flexibility, employee benefits structures for exempt and nonexempt employees, career advancement opportunities, new business formation, and business termination.
In addition to the economic analysis, the Secretary must also seek stakeholder input through a 120-day comment period, increase the effective date of any rule to one year after the rule’s publication, and make any increase in the salary requirement fit within economic realities of employees and employers.
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