SPRING 2024

44
THE DISTRIBUTOR’S LINK
Jim Truesdell
James Truesdell is Chairman of Brauer Supply Company, a distributor of specialty
fasteners, insulation, air filtration, and air conditioning with headquarters in St. Louis.
Mr. Truesdell is adjunct professor at Saint Louis University and Webster University.
An attorney and frequently published writer, he is the author of “Total Quality
Management: Reports From the Front Lines”.
LABOR DEPARTMENT MOVES TO IMPOSE DRASTIC
CHANGE TO OVERTIME THRESHOLD
Businesses are mobilizing to forestall a dramatic
increase to the minimum salary an employee must earn to
be classified as exempt from the overtime requirements of
the Fair Labor Standards Act. Those white collar workers
who partner with their employers as managers and
supervisors and who are paid a salary to get the job done
may soon find that if the annual salary they make does
not exceed a target of $1059 per week or about $55,000
annually they will be treated as hourly workers who must
be paid time and half for hours worked in excess of forty
per week. Rather than a gradual and incremental rise
which has taken the threshold to its current minimum
level of $35,568, a proposed regulation published last
Fall will send it skyrocketing up to 55 per cent. After the
DOL declined to extend a 60 day comment period for
the proposal, the agency is now considering submitted
comments and preparing to issue final regulations. It is
no coincidence that this will probably occur just as the
presidential election reaches its climactic stage early this
summer. It will present President Biden the opportunity to
tout it as a promise kept and posture himself as a fighter
for supposedly exploited workers, while making it difficult
for those who fear the sudden impact of the move on
business viability to raise objections without appearing to
be oppressing workers.
Some 240 plus national, state, and local organizations
representing employers of private industry and public,
nonprofit and educational organizations have combined
CONTRIBUTOR ARTICLE
into the Partnership to Protect Workplace Opportunity
(PPWO) to forestall this massive change which they argue
will disrupt industry and slow the development of future
business leaders who are eager to take responsibility within
their organizations and demonstrate their capabilities as
business managers. They risk having their roles revised
as they become classified as hourly workers with rigid
time-keeping requirements imposed. They also face the
possibility of cuts in salary as wages are adjusted by their
employers to balance out anticipated overtime which was
probably already taken into account in assigning salary
levels. By the Agency’s own estimate some 3.6 million
workers will be affected. They will face uncertainty as
companies struggle to decide if their salaries should be
raised to get them above the new threshold, if they should
be reclassified as totally hourly (which might affect their
sense of status and inclusion in management, if their
jobs should be restructured to distribute work functions
differently, or even if the increased costs will cost them
their job through layoffs. One of the PPWO organizations,
the National Retail Federation, contracted with Oxford
Economics to evaluate the proposal and they projected
that the number of workers likely to be affected would
be almost double to 7.2 million. Timing may also be a
factor as PPWO estimates companies might have to begin
reacting as early as May 1, 2024--- certainly a politically
convenient time for those who are proponents of the new
regs.
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