WASHINGTON, D.C. – U.S. Senator Thad Cochran (R-Miss.) today said a federal effort to overhaul overtime regulations could prove to be costly for nonprofit organizations, religious organizations, universities and employers in rural states like Mississippi.
Cochran, chairman of the Senate Appropriations Committee, on Thursday raised concerns about a pending overtime exemption rule at a subcommittee hearing to review the budget request for the U.S. Department of Labor. The rule would make more workers eligible for overtime pay by increasing the salary exemption threshold from $23,660 to $50,440.
“The overtime exemption rule is an example of the administration trying to rush new regulations before its term expires. It is troubling that such a significant rule change is being finalized despite widespread concerns about the effect this rule could have on businesses and organizations in rural states like Mississippi,” Cochran said.
“Before the Obama administration finalizes this rule, it should give greater consideration to regional wage differences and not so easily dismiss the possibility that the rule could force employers to reduce workers’ hours,” he said.
The new $50,440 threshold level would eclipse the average $36,000 annual wage in Mississippi.
Cochran noted that many Mississippi businesses and organizations have contacted his office to voice concerns about how the new rule could affect their businesses. An estimate from the Mississippi Department of Health indicated that its overtime exemption rate would drop to 11 percent of employees from 69 percent under the new standard.
The proposed overtime exemption rule, which was ordered through a presidential memorandum issued March 2014 that directed the Labor Department to adjust the Fair Labor Standards Act overtime regulations governing eligibility for overtime pay. The rule is currently undergoing a final review by the White House Office of Management and Budget.