Michigan Chamber Opposes Proposed Federal Overtime Changes

September 2, 2015

The Michigan Chamber has submitted comments to the US Department of Labor (US-DOL) regarding its proposal to substantially increase the number of workers qualifying for overtime, arguing the proposed rule goes too high, too fast and should be reconsidered. 

President Obama and US-DOL unveiled their proposal to unilaterally change the nation's overtime pay law in July, 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. 

The proposed rule is one of the most aggressive forms of federal governmental interference in the workplace we’ve seen in a decade or more. 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 Michigan Chamber warned the federal government that it cannot impose a government mandate of this size and expect it not to have a negative effect on the economy or the very workers it is hoping to help.

The window for public comment closes on September 4. The threat of the regulation becoming effective is real but it is unknown whether US-DOL will revise the rule based on concerns raised by the Michigan Chamber and others in the business community. Regardless, the change can go in effect without a Congressional vote. Legal experts fully expect the revised rules 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. A copy of the Michigan Chamber’s comments can be found here (link to attached article [put on web in issue center under OT]).

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