These days (like many of my peers here in Washington!) I am working overtime on the Department of Labor’s (DOL) proposal to change the #overtime regulations, which is now under final review. This regulation from Washington is a classic example of the law of unintended consequences.
Let me explain.
While I may be putting in some extra hours asking Congress to help push back this harmful #overtime rule, as an exempt professional, I am afforded the opportunity to do my job with a high degree of autonomy, working when and where it works best for me……….and this means everything to me!
As a single Mom of two elementary school age girls, the workplace flexibility I enjoy allows me to effectively juggle my two passions – my kids and my work. I can slip out for the honor roll assembly, chaperone field trips, and work from home when school closes for inclement weather. I typically work after the girls go to bed to catch up, but am able to oversee homework, dinner, and the bedtime routine…..priceless.
But under the Administration’s proposal to raise the salary threshold to be exempt from overtime pay by more than 100 percent (from $23,660 per year to $50,440 in 2016), countless employees will have to be reclassified to non-exempt status. This is especially true in certain sectors and geographic areas with a lower cost of living. So my exempt status may not be in jeopardy here in Washington where salaries tend to be higher, but in my home state of Nebraska, it’s a different story.
So what does the loss of exempt status really mean? Well, for many employees who have worked their way up to achieve this “professional” status, reclassification to hourly will be seen as a demotion. Most importantly, this change will mean a significant loss of workplace flexibility. Employees’ work hours will be closely tracked. Enter the notion of punching a time clock and rigid schedules. Exit workplace autonomy and flexibility that the 21st century workforce has grown accustomed to. In other words, this proposal will effectively turn back the clock on the modern workplace.
Proponents of this overtime regulation believe this rule will result in more take home pay for employees as they would now earn overtime pay. That’s just not the case, as employers with tight budgets will watch hours closely to control overtime costs. At the end of the day, most employees will not earn more money but will lose flexibility.
SHRM and many other members of the Partnership to Protect Workplace Opportunity are working to ensure that policy makers understand the unintended consequences this overtime proposal will have on employees, small businesses, nonprofits, local governments, and colleges and universities.
And some in Congress are listening. Recently, leaders in the House and Senate introduced S. 2707 / H.R. 4773, the Protecting Workplace Advancement and Opportunity Act. This reasonable legislation would not prevent the DOL from moving forward with a change to the overtime rules. It would simply require the Department to do a better economic analysis on the impact changes to the overtime rules would have on vulnerable groups. This is important for SHRM and our members who always maintained an increase in the salary threshold was warranted, but the current regulation was just too much, too fast.
Changes to the overtime rules should work for both employers and employees. Ensuring the DOL has access to better data can help them produce a new regulation that would do just that. It’s a responsible approach that HR professionals can and should get behind to avoid turning back the clock on the 21st century workplace. Please take action now in support of this legislation.
Lisa Horn is Director, Congressional Affairs and the Co-Leader of SHRM's Workplace Flexibility Initiative. Since 2004, Lisa has served as SHRM's chief lobbyist on health care and workplace flexibility public policy issues on Capitol Hill that impact the human resource profession.
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