Long-Awaited Overtime Rule is Issued; Opponents Weigh In

If you’re in or around the world of HR, you’ve been awaiting the details of the new overtime rule within the Fair Labor Standards Act (FLSA) — effective Dec. 1. This was done at the behest of President Obama, and executed by the Secretary of Labor. According to the U.S. Department of Labor, the new rule will:

  • Raise the salary threshold indicating eligibility from $455/week to $913 ($47,476 per year), ensuring protections to 4.2 million workers
  • Automatically update the salary threshold every three years, based on wage growth over time, increasing predictability
  • Strengthen overtime protections for salaried workers already entitled to overtime
  • Provide greater clarity for workers and employers

Here’s a video of Secretary Tom Perez explaining and advocating for the new rule:

Let it be known that not all are so enthusiastic, however. Opponents – a list that includes us at the Indiana Chamber, the U.S. Chamber, Society for Human Resource Management, many legislators and policy institutes  assert the new rule is unreasonable for several reasons, including the fact that some employees will lose their coveted professional exempt status.

UPDATE: Here’s more information from the U.S. Chamber on why this measure is so onerous. 

3 thoughts on “Long-Awaited Overtime Rule is Issued; Opponents Weigh In

  1. Do you know if the new rules include owner/employees? I am a 40% shareholder. Neither the 60% shareholder or I make $913 per week, but as owners we do frequently work more than 40 hours per week. Do we now have to track our hours and pay ourselves overtime? None of the articles I have found regarding this address this question. Can you help?

    • Hi Linda, our HR director actually did find that answer for you (basically, owners won’t be impacted by this new rule):

      A business owner is in a different classification, similar to teachers, lawyers, doctors, etc.

      Here is 29 CFR 541.101. This will not change under the final rules.

      – §541.101 Business owner. –
      The term “employee employed in a bona fide executive capacity” in section 13(a)(1) of the Act also includes any employee who owns at least a bona fide 20-percent equity interest in the enterprise in which the employee is employed, regardless of whether the business is a corporate or other type of organization, and who is actively engaged in its management. The term “management” is defined in §541.102. The requirements of Subpart G (salary requirements) of this part do not apply to the business owners described in this section.

  2. Hi Linda, you’re right, there doesn’t seem to be much addressing this topic. Our HR director is asking around, however, and if we get a useful answer, we’ll post it here in the comments.

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