WASHINGTON, D.C.—U.S. Senator Susan Collins released the following statement regarding the Obama Administration’s announcement of the final overtime rule, a major federal rule change that would double the salary threshold for workers entitled to receive overtime wages from $23,660 to $47,476:
“This new rule will be extremely damaging to small businesses, universities, nonprofit organizations, and service industries, particularly in rural states like Maine. While I support an increase in the salary threshold, a huge and sudden increase like this could hurt workers and employers alike and limit the services provided by nonprofits and educational institutions. For example, the University of Maine System, with 700 employees affected by the dramatic rise in the salary threshold, would face an estimated $14 million increase in annual operating costs if it restructured salaries to maintain the exempt status of these workers. To avoid changes in its salary structure that could force tuition increases or threaten university services, Maine’s University System is conducting an arduous and costly position realignment that could still result in an increase in annual labor costs. Likewise, small businesses could be forced to cut hours, benefits, and employees. The effect of this increase will be repeated at nonprofits and small businesses across the country.
“I have cosponsored legislation that would nullify this overly burdensome rule and require the Department of Labor to take into account the outcome of any future rule changes on our industries and organizations, as well as on various regions across our country with different costs of living. I strongly urge my colleagues on both sides of the aisle to support it.”
Senator Collins is a cosponsor of the Protecting Workplace Advancement and Opportunity Act, which would nullify this rule and would require the Department to take into account the effects of the rule and any future rules on small business, differences in geographical regions, and impacts on lower-wage industries.
Senator Collins also wrote recently to the Office of Management and Budget’s Office of Information and Regulatory Affairs, asking them to send the overtime rule back to the Department of Labor for reconsideration and substantial changes.