Kentucky Chamber: Federal Overtime Rule will hurt Workers and Employers

The Kentucky Chamber filed formal comments with the Federal Department of Labor opposing proposed changes to the proposed overtime rules. Echoing the concerns expressed by Chamber members in its letter, the Chamber noted the proposal would do more to hurt workers than it would help.

The U.S. Department of Labor’s Wage and Hour Division announced the proposed rule to change the overtime rules in June. Currently, salaried workers are eligible for overtime compensation if they work over 40 hours per week and make $455 per week or less ($23,660 annually). The proposal would more than double this rate to $970 per week ($50,440 annually).

Proponents argue this change will give more Americans pay increases through overtime pay; however, the real result will likely be slashed hours, fewer benefits and less flexibility. For more details on the proposed policy, download the Kentucky Chamber issue brief.

According to Chamber senior vice president Bryan Sunderland, “this proposal will make it more difficult for employers to promote and advance employees who show promise to management positions. It is actually very likely that the proposal will exacerbate the wage gap this proposal seeks to address by forcing employers to limit hours and opportunities.”

In its formal comments to the Department of Labor, the Chamber noted that the department’s own estimates indicated that roughly 75 percent of employees would not see increased pay, but the proposal would cost Kentucky employers $19 million to comply with the proposal.

The new policy may have far reaching impacts on employer flexibility, such as working from home, working remotely and may impact policies regarding mobile devices as it will be difficult for employers to properly track time. This change will impact local chambers, non-profit and charitable groups as well as manufacturers, retailers, restaurants, professional services and other traditional businesses.

The Chamber is encouraging employers to make their voice heard on this important issue. Employers wishing to speak out and explain how this policy would affect their business and their employees can submit comments by clicking here or by visiting Regulations.gov and entering WHD-2015-0001 in the search bar. Comments must be submitted by Friday, September 4, 2015.

Categories: Kentucky Competitiveness

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