JEFFERSON CITY, Mo. – Some Missouri businesses and nonprofits oppose the new federal rule on overtime, saying it will force them to reconsider how their employees are allowed to work and actually move some employees from having a salary to being paid hourly. They’re also encouraging Missouri’s Congressional delegation to unite to overturn the rule.
The Department of Labor’s final rule on overtime would increase the threshold mandating overtime pay from employees making $23,660 a year to $47,476. That salary matches the 40th percentile of employee salaries in the United States. The rule also requires that the salary threshold be changed every three years to match the 40th percentile.
Missouri businesses and especially nonprofits are concerned about the rule and pace at which it will be implemented; it takes effect Dec. 1.
“The new department of labor rule impacts a charity like ours,” said Joy Krieger, executive director of the Asthma Allergy Federation of America, St. Louis. “It impacts our budget, it impacts the services we provide and this rule will impact our hiring process. It will impact our staffing process, and we need Congress to intervene.”
Krieger said nonprofits, like hers, often have very tight budgets and the rule may force her to change some employees from salaried to hourly. She also pointed out that, unlike businesses, nonprofits have very few ways to generate the revenue needed to pay their employees more money for overtime.
“This rule ignores the regional differences that impact charities like ours and could force nonprofits, municipalities and schools in St. Louis and across the country to reexamine how they staff, who they hire and the services that they provide,” Krieger said.
Another part of the rule she found problematic was that it’s a blanket rule for the country and does not take into account different costs of living in different areas.
Missouri businesses are also struggling to cope with the rule.
“This rule is a false promise once again offered by the Department of Labor and the Administration,” said Dave Overfelt, president of the Missouri Retailers Association. “This places an undue burden on employers in our state at all levels – it’s a career killer.”
The rule came about as part of President Barack Obama’s directive to the Department of Labor to update and modernize overtime rules under the Fair Labor Standards Act. He said in an email to supporters of the petition that the rule has undergone review for more than a year.
Proponents of the rule change, including Obama, argue that changing the overtime rule was one way to help increase wages for workers during a time that they have become stagnant.
“This is a step in the right direction to strengthen and secure the middle class by raising Americans’ wages,” he wrote. “When workers have more income, they spend it – often at businesses in their local community – and that helps grow the economy for everyone.”
The White House expects the rule to cover an additional 4.2 million Americans and increase wages for workers by $12 billion over the next 10 years. Department of Labor estimates show that about 85,000 Missouri workers would be affected by the change.
But those workers could be affected in adverse ways, which is why Krieger and Overfelt have appealed to U.S. Sens. Roy Blunt and Claire McCaskill to work to overturn the rule.
“It’s time for Congress to work in a bipartisan fashion and intervene on behalf of their constituents,” Krieger said. “I urge Senator McCaskill and Senator Blunt to work together and find a solution that can fix this and not harm a charity like ours.”
Overfelt echoed Krieger’s comments, saying, “It’s time for Senator McCaskill and Senator Blunt to find a bipartisan solution that works for Missourians.”