Last month, a Federal Judge granted an injunction against the Department of Labor’s Overtime Rule which was scheduled to go into effect December 1. This rule would raise the threshold to qualify as a salaried employee from $23,660 to $47,000— substantially higher than the median income in Arkansas. This increase would have a devastating impact on businesses, employers, and workers across the Natural State.
Currently, employees can become salaried professionals as long as they earn at least $455 per week or $23,660 annually. But under this new regulation, anyone making less than $47,000 per year would be considered an hourly employee. This means many salaried employees would be eligible for overtime, but they would have to return to their hourly wage which could result in less responsibility, base pay cuts, less flexibility, and fewer hours as employers struggle to afford this new compensation scale.
Simply put: for Arkansas workers, this rule would hurt the very people it claims to be aimed at helping.
It’s important to point out that this injunction has no impact on current overtime rules. Employees will still receive the overtime wages they are currently owed. However, it will stop this dangerous change from going into effect until it makes its way through the judicial review process.
This ill-advised rule is just the latest example of executive overreach by the Obama administration. And it serves as a perfect example of the problems one-size-fits-all rules can cause. Arkansas is a special place and our needs are very different than the needs of New Yorkers or Californians. Only we know our own diverse and local circumstances. That’s why the states need more flexibility to make these decisions for themselves.
I’m pleased the implementation of this rule has been paused. I look forward to working with the new administration to permanently repeal this rule to protect all Arkansans.