File photo: Learfield
New federal overtime rules are prompting a wave of concern from Wisconsin’s largest business lobbying organization.
The rules unveiled this week essentially double the threshold for when businesses have to pay employees overtime – from earnings of $23,660 a year to $47,476. The move is expected to impact the pay, or time spent on the job, of nearly 4.2 million Americans.
The rules, which take effect December 1, have resulted in widespread concerns from business and government leaders, who argue they could drastically increase administrative and labor costs for employers.
While the rules are intended to make sure workers who spend more than 40 hours on the week are fairly compensated, Chris Reader with Wisconsin Manufacturers and Commerce contends that it’s not going to always work out that way. Instead, he says the promises of higher wages across the board will more than likely turn in to cases where workers see pay cut or positions reduced. “The very workers that this is aimed to protect…they will see less hours…they will be reduced from salaried to hourly and they’ll have wages cut.”
Also, he notes that the rules fail to take into account the fact that many employers likely will be unable to shoulder the added expenses that come with shifting some workers from salary to hourly positions. “In terms of how much money that company or that employer actually has on hand to spend on payroll and to spend on benefits…that number stays unchanged.”
WMC is calling on the state’s Congressional delegation to help keep the change from taking effect next December or to convince the administration to shift the number down. “Doubling it certainly seems to be too high to fast, but maybe if they would entertain coming back at a lower threshold that would be something that perhaps coalitions around the country could get behind a little bit easier…and it would have less of a dire consequence on the economy.”