Fewer opportunities to work overtime, less workplace flexibility for employers and employees alike: That’s the likely result of the Department of Labor’s proposed rule to more than double the salary threshold that makes white-collar managers eligible for overtime pay, according to comments submitted to the DOL by the Society for Human Resource(SHRM) and WorldatWork, two prominent HR organizations.
The public comment period for the proposed white-collarclosed on Sept. 4. Now the DOL will begin analyzing 247,064 comments submitted by employers, employees, economists and business groups.
The rule would raise the salary threshold at which an employee is eligible to be classified as exempt from $23,660 to $50,440.
Employers are likely to respond by reclassifying many exempt, white-collar employees whose earnings are near the new threshold, turning them into hourly, nonexempt workers instead.
According to the DOL, more than 3.5 million workers who earn less than the proposed salary threshold do not regularly work overtime—or more than 40 hours in a week.
SHRM’s comments stated, “Although they are the employees most likely to be reclassified as nonexempt under the proposed regulation, they won’t benefit from the change. Instead, they are likely to experience negative consequences of reclassification—limited or no access to overtime [and] reduced workplace flexibility.”
WorldatWork, which focuses on compensation issues, said a survey of its members found that nearly 80% fear that a reclassification to nonexempt status would hurt morale, as exempt classification is a perceived measure of status.
SHRM backed up its comments with results of its own survey showing that 70% of responding HR professionals say it’s likely that employees who are reclassified under the new regulation would have fewer opportunities to work overtime.