SANDY — A new U.S. Department of Labor rule that goes into effect later this year could mean more overtime pay for some salaried workers.
But Rep. Mia Love, R-Utah, said Monday that the new rule is a slap in the face to Utah managers and business owners.
"It will be devastating to many Utah businesses," she said. "It creates a financial burden entangled in government red tape under the guise of helping workers."
Since 2004, salaried workers have been exempt from overtime laws if they earned more than $23,660 a year.
Beginning Dec. 1, the "Overtime Rule" raises the salary threshold under which salaried workers are eligible to receive overtime pay to $47,476 a year.
The Overtime Rule is intended to pay more money — overtime — to middle class workers who work more than 40 hours or give them more free time by capping their work weeks at 40 hours. The rule is also intended to prevent future erosion of overtime protections, the department's website states.
The updated regulations are meant to simplify and modernize the overtime rules so they’re easier to understand and apply, according to the Department of Labor.
The Bureau of Labor and Statistics place the average Utah wage at $43,108, which means the proposed threshold for exempt status is 17 percent higher than Utah’s average wage level.
"The Overtime Rule hurts those that it’s bound to protect," Love said. "It hurts flexibility without improving pay. It removes health care benefits from families that make under $47,000. This is one more example of Washington arrogance thinking they can fix everything and not involve the American people. Enough is enough."
Most businesses currently have the option to hire employees based on salary or hourly pay, but the regulation change will affect the pay of more than 36,000 Utah white-collar salaried workers, according to the department.
Love argues that raising the salary threshold should not be a "one size fits all."
"Hard-working Americans will feel as if they are being demoted when they go from salary to hourly status," Love said. "Many hard-working families, and this is the most important thing, lose their much needed health care benefits when they’re moved from salary to hourly pay."
The rule could force employers to change salary employees to hourly wages, cut the hours of hourly employees to avoid overtime pay and reduce benefits or work flexibility for former salary workers, she said.
Love said her resolution, HR836, takes a stand against the Department of Labor's rule.
"This resolution disapproves the DOL's Overtime Rule, which places significant burden on companies by doubling the current overtime exemption salary level. If the rule goes into effect, then many current salaried employees will be moved to hourly wages and lose many of their benefits," the resolution states.
Love said if her resolution passes, it would stop the Department of Labor's Overtime Rule.
"Our businesses will adapt," she said. "But you tell me how a family is going to adapt with the loss of a job, or the loss of a benefit, or complete restructure of how they’re getting paid."
Love invited some business leaders who support her resolution to her press conference Monday at the Sandy Chamber of Commerce.
"The overtime rule is meant to help workers, but it's actually damaging to them," said David Harper, owner of Meridian restaurants. "This is also demoralizing to employees who have worked hard for a salaried position, but who may be moved to an hourly position moving forward."
Dave Davis, CEO of Utah Food Industry Associations and president of Utah Retail Merchants Association, said he recently partnered with a national association and found total average federal compliance costs a single independent supermarket around $50,000 per year.
"We are on an unsustainable path with this regulation and these administration agencies," he said.
Maxine Turner, founder of Cuisine Unlimited, said her business is studying how many employees will lose benefits and training opportunities after moving from salary to hourly wages.
"This kind of regulation hurts employees," she said. "This kind of regulation will stop the growth of jobs in this country."