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What They’re Saying: Real-World Consequences of DOL’s Overtime Rule

While families continue to struggle under an anemic economy, the Obama administration continues to advance the same-old failed policies that are holding workers and small businesses back. The latest example? An overtime rule the Department of Labor promises will cure years of stagnant wages that continue to hurt working families. Instead of addressing the underlying causes of slow job growth and a weak economy (hint: things like costly regulations), the department thinks it can just wave a magic wand and mandate higher wages.

Unfortunately, as we’ve seen in recent years, there are real-world consequences for the administration’s flawed top-down approach, and the overtime rule is no exception. But don’t just take our word for it. Stories and individuals from across the country continue to highlight the costly consequences of the department’s extreme and partisan overtime rule, including:

Less workplace flexibility and upward mobility.
  • "It will have a severe, negative impact on many of the employees … This will reduce the chance for employees to qualify as exempt salaried workers and would lead to less management opportunities for employees with no guarantee of higher income." Manoj Bhoola, president and CEO of Elite Hospitality Inc.

  • "This change affects about a third of our fulltime staff. The headline is, ‘everybody gets a raise.’ The reality is very few people get a raise. The people who keep their jobs are going to see their working conditions change drastically." – Dr. Tom Bogart, president of Maryville College

  • "I think what’ll end up happening is that you’ll have some people get bumped up to $48,000 ... and a lot of people will get hired at lower salaries. So where you might have gotten hired at 35 or 40 [thousand dollars], you’ll now get hired at 28 or 32 [thousand dollars]." Tom Gimbel, founder and CEO of LaSalle Network

  • "Employees looking to work a little harder to advance their careers will be the casualties of this rule because middle-management positions will turn into clock-punching ones, without the prestige, benefits, flexibility, bonuses and perks that come with being salaried employees … The overtime rule is a step in the wrong direction." Adam Robinson, CEO of Hireology

  • "Businesses warn they’ll have to limit the number of middle managers they hire or bring in part-time employees to perform tasks that regularly scheduled workers are unable to do. Experts say this could cause businesses to promote fewer middle managers and lead to a decline in employee morale." – Indianapolis' IndyStar

Fewer non-profit services for individuals in need.

  • "We are concerned this regulation may lead to service cuts for persons with intellectual/developmental disabilities and serious mental illnesses and further exacerbate the workforce crisis facing nonprofit community-based providers in Illinois." – Janet S. Stover, president and CEO of the Illinois Association of Rehabilitation Facilities

  • "Because many of the essential services we provide are delivered after typical business hours and weekend, nonprofits will absolutely be impacted. We work when our clients and individuals need us." – Shannon Ammons, CEO of the Alabama Association of Nonprofits

  • "These reclassified employees will face increased restrictions on the hours they can work, which will limit the opportunities and eliminate flexible schedules that attract people to these jobs and enable our nonprofits to provide certain services." – Matt Leonard, president and CEO of the Lewiston Auburn Metropolitan Chamber of Commerce

  • "Critical services to the community could be cut to pay that overtime … I’m frustrated. Why is government coming in and telling us how to run our nonprofits?" – Brita Horn, Routt County treasurer and chief of the Rock Creek Volunteer Fire Department

Higher college costs and diminished opportunities for younger Americans.

  • "Higher education faces an ever-increasing burden of regulation from Washington and the cost of implementing administrative directives such as this one stresses our budgets and contributes directly to the cost of earning a college degree." – Bill Tsutsui, president, Hendrix College

  • "The White House wanted to wave its magic wand and create higher salaries for many Americans who don’t qualify for overtime pay. Such pronouncements, however, often create unintended consequences. That includes the possibility of higher tuition — an impact that goes against President Barack Obama’s mission to make college more affordable." – The Detroit News

  • "I worry that the changes would take a grave toll on institutions like mine that are enrollment and tuition driven. They could also significantly limit opportunities for young people in our society to receive entry-level positions at our colleges and universities … Because of that first job as a coach -- albeit at a low salary -- I was able to launch my career in higher education. Yet the proposed changes would nullify such opportunities for thousands of people just starting out by essentially removing entry-level positions that recent college graduates rely on." – David Armstrong, president, Thomas More College

  • "People starting out in careers tend to be salaried at lower levels … That's one way to climb up the ladder: to work your rear-end off to demonstrate your value and commitment. Now, you might be prevented from doing that by this rule. So how do you demonstrate your value?" – Sean Snaith, economist, University of Central Florida

To learn more about how the overtime rule will hurt workers, students, small business owners, vulnerable individuals, and younger Americans, click here.

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