The Society for Human Resource Management (SHRM) has recently called on the federal government to delay the implementation of its forthcoming overtime regulation until 2025. The U.S. Department of Labor proposed a Fair Labor Standards Act (FLSA) rule in August that would make it mandatory for employers to pay overtime to all workers earning less than approximately $55,000 when they work more than 40 hours in a workweek. In response, SHRM submitted a comment to the Department of Labor (DOL) requesting an extension of the proposed 60-day implementation period.
The Society for Human Resource Management (SHRM), a professional HR organization, has urged the government to delay the implementation of overtime regulation. SHRM has expressed concerns over the potential challenges faced by businesses if the proposed regulation is implemented without sufficient time for preparation. SHRM argues that the implementation process will primarily fall on HR professionals and business executives, who will need to make crucial decisions regarding salary adjustments or worker reclassifications. However, these decisions will also impact other departments such as finance teams, IT departments, and managers.
Insufficient time for assessment and organizational strategy
In its comment to the DOL, SHRM highlights the need for an extended implementation period, advocating for a delay until January 1, 2025. According to Emily Dickens, SHRM’s Chief of Staff, Head of Public Affairs, and Corporate Secretary, the proposed 60-day period is simply inadequate for businesses to fully assess the final rule, identify affected employees and roles, and develop and execute an organizational strategy with structural changes.
Impact on smaller businesses
SHRM emphasizes that while some employers may be equipped to handle the changes, many smaller businesses are not. Adapting to the overtime regulation would be particularly challenging for these organizations, which may lack the necessary resources or infrastructure to promptly comply with the regulation within a short timeframe.
Concerns about automatic increases for the threshold
Apart from the implementation period, SHRM also raises concerns regarding the DOL’s proposed automatic increases for the salary threshold. The current proposal suggests resetting the threshold every three years. SHRM argues that continued increases in the threshold could lead to a significant reduction in the importance of the FLSA’s duties test, which is an essential component in determining whether employees qualify for overtime pay.
While addressing concerns about the proposed threshold increase, SHRM also suggests that the DOL consider a lower threshold altogether. SHRM acknowledges the need for an adjustment from the current $35,000 threshold but does not provide a specific dollar figure as a recommendation. Nevertheless, the organization believes that the proposed $55,000 threshold represents a considerable leap, requiring careful consideration of the potential consequences for businesses across industries.
The Society for Human Resource Management’s call to delay the implementation of the forthcoming overtime regulation until 2025 emphasizes the need for businesses to have adequate time to assess the final rule, evaluate its impact on their workforce, and make informed decisions about salary adjustments and worker classifications. SHRM highlights the difficulties faced by smaller businesses in complying with the regulation within a short timeframe and expresses concerns about the proposed automatic increases to the salary threshold. As the DOL considers the feedback from SHRM and other stakeholders, it is imperative to strike a balance that ensures fair treatment for workers while also considering the operational challenges faced by businesses of all sizes.