Michigan Chamber Opposes Obama Overtime Proposal

July 6, 2015

President Obama unveiled his proposal to unilaterally change the nation's overtime pay law last week, announcing a rule change to dramatically expand the number of employees who can qualify for overtime pay. The proposed rule would raise the threshold for guaranteed overtime pay from a salary of $23,660 to $50,440.

Although the Michigan Chamber is still reviewing the details of the regulatory change, it appears to be one of the most aggressive forms of federal governmental interference in the workplace we’ve seen in a decade or more. We plan to oppose the proposed rule change once the window for public comment is open, reminding the Administration that it cannot impose a government mandate of this size and expect it not to have an impact on the economy or the very workers it's hoping to help. 

In fact, because the rule change is intended to greatly increase how many salaried employees can claim overtime, and thus increase labor costs, many companies will be forced to use more part-time and entry-level workers, offer fewer promotions and/or convert salaried employees to hourly to avoid raising their pay.

The threat of the regulation becoming effective is real. There is a 60-day mandatory comment period, but the change can go in effect without a Congressional vote. Legal experts fully expect the rule to become effective in 2016. 

To familiarize yourself with the proposed rule, we would recommend you review legal analyses prepared by Chamber members Clark Hill and Barnes & Thornburg LLP

For more information, contact Wendy Block, Director of Health Policy & Human Resources, at wblock@michamber.com or (517) 371-7678.