On July 6, the U.S. Department of Labor released its proposed rules for increasing the eligibility requirement for workers to receive overtime payments when working more than 40 hours per week. President Barack Obama’s statement on the issue estimated this would affect nearly 5 million U.S. workers.

However, the U.S. Chamber of Commerce statement about this rule shines light on a  possible reverse effect: “Making more employees eligible for overtime by severely restricting the exemptions will not guarantee more income, but instead will negatively impact small businesses and drastically limit employment opportunities. Additionally, many reclassified employees will lose benefits, flexibility, status, and opportunities for advancement. This change is another example of the administration being completely divorced from reality and adding more burdens to employers and expecting them to just absorb the impact.”

More recently a study by the Heritage Foundation found that employers will react to these changes by:

1. lowering base salaries to accommodate overtime pay; and
2. rigidly tracking employee work hours and less flexibility for salaried workers to work from home.

The DOL has issued a request for information regarding the hours of work conducted outside of the workplace using electronic technology. The rules are clearly overlooking the modern work structure for higher salaried employees. The chamber plans to submit aggressive comments by the Sept. 4 deadline and it will request an extension. IWLA Washington Representative Pat O’Connor is attending a roundtable meeting on this topic today.