Overtime rule reclassification will hurt employees and employers

The Department of Labor (DOL) is proposing a reclassification of what defines employee overtime eligibility.

Under current regulations, a worker qualifies for overtime pay if his or her wages for 40 hours of work per week fall below a $23,660 threshold. The proposed rule would more than double that threshold, making employees earning up to $50,440 eligible for overtime when the regulation takes effect. In addition, this threshold is scheduled to go up each year so that it continues to reflect the 40th percentile of earners.

This new rule would burden employers with huge expenses and downgrade many salaried workers to hourly workers. By raising the salary threshold for executive, administrative, and professional employees, employers will be forced to decide whether to reclassify millions of employees to non-exempt status or increase their salaries to keep them exempt. Workers would be paid only for hours they actually work, and may not actually earn overtime as many employers will limit their work hours to fewer than 40 in a week.

The Kentucky Chamber of Commerce believes this would greatly interfere with businesses’ ability to manage their workforce for growth. In 2015, the Kentucky Chamber submitted comments to the Department of Labor voicing opposition and highlighting the negative impact it would have on Kentucky’s businesses.

The Chamber is asking that you add your name and business to tell the DOL that this proposed rule will not boost employees’ income, but instead will force employers to reduce employees’ flexibility, benefits, and growth opportunities.

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