Proposed Rule “Exempts” Businesses from Competing
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The US Department of Labor is the latest agency to jump on the government overreach bandwagon as they have put their targets on our business community. In a new rule published by the US Department of Labor, DOL, is proposing to change the minimum salary threshold for exempt employees from $35,568 to $55,000 annual salary. If enacted, this rule change will affect thousands of businesses in the Dayton region and force employers to go through the administrative burden of reclassifying 3.4 million employees across the country. The ripple effect would also force some employers to raise wages so that they can accurately classify employees as exempt. Raising wages alone will cost employers millions of dollars and force them to have to cut staff, not invest their business and not hire open positions. One employer in Dayton estimated that this federal rule change would cost them $2.2 million. This is the impact on just one Dayton employer! Imagine the multiplier effect this will have across our 19,000 businesses in the Dayton region.
In what world does it make sense to continually saddle businesses with the costs and administrative burdens of big government regulations?
The business community has not been immune to the effects of wage increases. This proposal comes on the tales of significant COVID-19 wage increases that the business community has incurred over the past 24 months. In 2022, the average wage increase was over 4% and in 2023, the average wage increase was 4.3%. The lowest paid workers saw an average of a 9% increase between 2019-2022.
In 2017, a federal judge struck down an attempt to change the minimum exempt threshold hold from $23,600 to $47,000. Ultimately, a new $35,568 threshold was put in place in 2020. If this rule is enacted, I would expect a similar legal challenge from the business community and a similar action from the court. It’s just bad policy.
The Dayton area business community is at a tipping point. This constant assault on business’s freedom to manage their operations has to come to an end. These drastic government regulations will having a devastating impact on the economy, forcing inflation to continue to rise, causing interest rates to increase and ultimately businesses could reduce staffing levels. We can still get out of a post-pandemic economy without significant damage, but if these types of burdens are enacted, then all bets are off.
Chris Kershner
President & CEO
Dayton Area Chamber of Commerce
