Overtime Rule Changes Raise Concerns Among Businesses

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The Department of Labor (DOL) issued a rule change on Wednesday that allows full-time, salaried employees to earn overtime if they make up to $47,476 a year. The rule change, which was first announced in a Notice of Proposed Rulemaking in the Federal Register on July 6, 2015, goes into effect December 1 and is expected to extend overtime pay protections to more than four million workers.

The new salary threshold of $913 per week for overtime-eligible workers, while less than the originally suggested $970 per week, represents a 101-percent increase. Critics note that for many small businesses, nonprofits, colleges and universities across the country, the new rules ignore a range of economic variables and financial constraints placed on public and private employment sectors and puts a great burden on how businesses and organizations classify their employees, many of which are unaware of these rule changes.

“We feel the threshold should be increased, but the new $47,000 threshold is too much for a one-year leap,” says Chris Vernon, MAS, president and CEO ofThe Vernon Company. “We don’t expect this mandate to cost us much in direct labor, but the cost of new federal regulations just keeps going up and up. This is not to mention the potential demotivation for a 10-plus-year manager of now having to punch a time clock.”

Efforts are being made to require the DOL to evaluate the true cost of its rule changes, which have already been described as having strong negative economic repercussions. The Protecting Workplace Advancement and Opportunity Act addresses the deficiencies of the DOL’s rules by requiring a full economic impact study to evaluate the true cost incurred by these rule changes.

While the DOL’s rule changes have been made, PPAI’s advocacy in partnership with coalition members will continue to support legislation that takes into consideration its impact on the promotional products industry. This will be one of the messages a group of more than 70 industry professionals will bring to Capitol Hill May 25-26 during the seventh annual PPAI Legislative Education and Action Day (L.E.A.D.). PPAI member volunteers and staff will hold approximately 250 meetings with senators, representatives and legislative staffs to discuss pending legislation and issues relevant to the promotional products industry.

Industry members can add their voices to the discussion through the L.E.A.D. Virtual Fly-In. Find out more about L.E.A.D. and the virtual fly-in at www.ppailaw.org. Follow L.E.A.D. next week on social media on twitter @PPAILAW and the hashtag #PPAILEAD.

The Small Business Legislative Council, of which PPAI is a member and PPAI president and CEO Paul Bellantone, CAE, serves as a board director, has released its own analysis of the overtime rule changes. PPAI shares its findings here.

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