WASHINGTON, D.C. - Tens of thousands of U.S. businesses - including wood manufacturers and their suppliers - will be affected when new changes to the wage and hour rules take effect December 1.

The Department of Labor has amended the annual earnings threshold for employees to qualify for overtime pay - known as exempt status - from $23,660 to $47.476, a 101 percent jump. This would require employers either to increase pay, or change the status of any employee earning less $47,476 to "non-exempt status," which under the Fair Labor Standards Act means they owuld get overtime pay.

Non-exempt status comes with another whole set of rules, including paying overtime and having work hours accurately tracked. Beginning in 2017, the minimum salary would automatically increase every three years to match the 40th percentile of the average salary earned by full-time employees in the United States. DOL estimates that 4.2 million workers are impacted by the rule.  

According to the Wood Machinery Manufacturers of America, the new wage and hour rules are fraught with potentially unintended consequences for many of the workers it is meant to benefit. Employers might choose to cut staff or reduce some employees to part-time status. In addition, exempt employees who currently enjoy flexible hours might lose that privilege as their employers require them to log their hours to make sure they do not exceed 40 hours in any given week. Many employees will also find that the rules create new roadblocks to advancing their careers.  

Bills in the House and Senate were introduced in March 2016, one by Sen. Tim Scott (R-S.C.) and another by Rep. Tim Walberg (R-Mich.), that would nullify the proposed new rules (S. 2707 & H.R. 4773 - Protecting Workplace Opportunity and Advancement Act). Additionally, the bills would require that a comprehensive economic analysis be conducted to minimize the impact on affected employers before promulgating any substantially similar rules.

WMMA says its members, most of them small businesses, stand to be among the enterprises negatively impacted by the dramatic changes the Department of Labor is making to the wage and hour rules.  www.wmma.org.

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