As many in the business community are acutely aware, the Department of Labor (DOL) has proposed a regulation that would double the minimum salary that an employee would have to earn to be exempt from overtime under the executive, administrative and professional exemption from $23,660 to $50,440 annually. When an employee is “exempt” from overtime, the employer does not need to pay time and a half for hours worked over 40 hours per week.

This would require countless employers to make the difficult decision of whether to increase employees’ salaries to keep them exempt or reclassify employees to nonexempt status. Many times, the latter also means that the employee will be transitioned from salaried to hourly, leading to less flexibility, dissatisfaction, and a sense of demotion. In short, this proposed rule, which the Ohio Chamber and the US Chamber submitted comments on, would be devastating for Ohio businesses. Even though more than 290,000 comments were submitted on this proposed rule, it appears that those comments have been ignored and the DOL plans to move forward with the rule as early as May or June.

However, there is still hope. Legislation titled the “Protecting Workplace Advancement and Opportunity Act” (S. 2707 / H.R. 4773) has been introduced in both chambers of Congress. This legislation would prevent the DOL’s proposed overtime regulation from taking effect and details the circumstances for proposing a new overtime rule. The US Chamber will be sending a letter to members of Congress urging their support of the Protecting Workplace Advancement and Opportunity Act. A copy of the letter can be found HERE.

For additional information, please check out the links below:

• Ohio Chamber Blog Post on Preparing for the DOL Rule Changes
• Ohio Chamber Blog Post on Comments Submitted on Proposed Rule Change
• US Chamber Article on Impacts of Proposed Changes