In follow up to our July 16th, 2015, blog post titled “Preparing for DOL Proposed Changes to White Collar Exemption,” the Ohio Chamber and the US Chamber both submitted comments on the proposed Department of Labor (DOL) rules. Among the proposed changes, which are outlined in more detail in the July 16th blog post, the DOL sought to more than double the minimum salary threshold to qualify for the white-collar overtime exemption from $23,600 to $50,440 and create automatic yearly increases to that number.
The proposed rule led to an outpouring of responses from the public, businesses, and business groups across the country. In fact, the DOL received more than 289,000 comments on the proposed rule. As stated in our comments, some of the major concerns include:
- Reclassification of employees from exempt to non-exempt for overtime purposes will result in employers shifting employees from salary to hourly in order to properly track time.
- With a greater need to monitor employees’ hours to know whether overtime is due, many employers will have to enforce strict work hours for employees and limit employees’ ability to work offsite or from home. This leads to decreased flexibility for employees.
- Employers may also have to reduce training opportunities for employees—many of which are offered outside of, or in addition to, normal work hours—rather than pay the overtime rates associated with providing such opportunities.
- Many employers operate on thin margins and, rather than incur the burden of increased costs, will simply manage their labor costs by limiting the number of hours employees are permitted to work.
- Many employees would interpret the change from salaried to an hourly status as a demotion, hurting morale.
- The proposed changes also fail to take into account local cost of living throughout the country and diverse conditions within our state. The proposed rule instead imposes a one-size-fits-all approach that doubles the salary threshold and neglects the fact that wage conditions in a Bucyrus could be completely different from Cincinnati or that Ohio may be different from California.
Now that the public comment period has ended, the DOL will review the comments it received, and determine whether the agency will make any changes to the final rule before implementing it. We hope that the DOL takes into account the real and practical concerns of the business community and does not implement this rule as proposed. The anticipated implementation date for the final rule is some time in 2016.