New Overtime Rule May Have Costly Ramifications
(Washington, D.C.) – Today the Department of Labor announced a final rule regarding eligibility for overtime compensation that would affect up to 5 million workers. The rule more than doubles the threshold salary level that determines which employees would be eligible for overtime – from $23,660 to $47,476 annually. While the effects of this dramatic change may be hard to predict, non-profits like the American Red Cross have already expressed concern that it will limit their ability to help with disaster response. Additionally, small businesses will have a new incentive to shift employees to hourly work instead of annual salaries, essentially creating a situation in which employees are less likely to take advantage of critical after-hour activities such as networking, career building, education, and community events that may help them advance their careers.
Daniel Garza, Executive Director of The LIBRE Initiative, released the following statement:
"We have seen time and time again that a large government that creates these burdensome regulations ultimately hinders job growth and hurts the very individuals the rules were intended to benefit. Many Latinos risk it all to come to his country for the promise that hard work will be recognized and rewarded. However, under this new rule many employers may be forced to cut employee hours and reduce bonuses in order to comply with the rule. During the Department of Labor comment period on this proposal, 250,000 comments were submitted – the majority from employers who felt their employees would be worse off under this rule. These grievances have been ignored. Of course we want hard working Americans to earn more money, but this rule may have the opposite effect. The Obama Administration needs to stop imposing onerous regulations that arbitrarily create winners and losers in the economy. Real wage increases result from a thriving economy that is led by workers, entrepreneurs, and risk-takers – not from federal rules and mandates."
For Interviews with a representative from The LIBRE Initiative, please contact Brian Faughnan, 703-678-4581