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Overtime Proposed Rule Will Result in "Hard Choices" for Some Employers (SHRM)

Allen Smith at SHRM Online continues his coverage of the DOL's proposed overtime rules in this latest article, "Overtime Proposed Rule Will Result in 'Hard Choices' for Some Employers," which looks at the difficult choices employers are facing in deciding how best to cope with the expected new rules.

The article does an excellent job of addressing how the new rules will impact employers differently, but that each employer should be taking steps now to assess the rules' impact and plan accordingly.  As I state in the article: "The proposed rule affects different employers in different ways,” and its effect “will depend on factors such as the strategic goals of the organization, its business model, the type of industry and regions in which they operate, the overall competitive landscape, the organization’s culture, and so on. After running that analysis, each employer will decide how, if at all, they will change their pay practices to satisfy the dictates of the new rule.”

For example, employers with workforces that almost never work overtime will not be impacted significantly or even minimally by any required reclassification.  Other employers, such as employers in the retail or hospitality industries, will feel the rule’s impact more acutely since they currently employ many exempt workers who fall below the contemplated salary threshold.  They will have to determine which pay practice changes (e.g. increase salary, reduce hours, additional staffing, etc.) align best with their strategic goals and account for these other factors and proceed from there.

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