OCEAN CITY – New overtime rules set by the U.S. Department of Labor took center stage Tuesday at a seminar hosted by the Ocean City Chamber of Commerce and the Ocean City Hotel-Motel-Restaurant Association (OCHMRA).
Attorney and guest speaker Doug Desmarais of Smith & Downey, P.A. addressed questions and concerns from nearly 80 local business owners who attended the event.
The administration’s new guidelines on overtime pay will take effect in every state Dec. 1, but with unique seasonal employment and business hours, many Ocean City employers at the meeting stressed their concerns about current and future business practices.
“Unfortunately, the folks who are running laws are not always people that have lived and walked in your shoes,” Desmarais said. “They paint things with a very broad brush.”
Currently, white collar salaried workers, such as those with executive, administrative and professional duties, making more than $23,660 annually, or $455 a week, are not eligible for overtime pay.
With the new rules, these exemptions will now meet a larger salary threshold, giving workers who make less than $47,476 annually, or $913 a week, the opportunity to be paid for overtime work.
Any employee eligible for overtime pay will receive time-and-a-half for any work that exceeds the 40-hour work week.
Employers will have the option to exempt employees from overtime pay if they meet criteria set by the salary and duties test, which remains unchanged, but the goal of the new guidelines is to raise low and middle-class incomes and to incentivize employers to either supply overtime pay to affected employees or to simply raise their salary to avoid paying overtime.
With the new changes, employers will now be responsible for tracking a salaried worker’s hours, making the switch to hourly pay an attractive incentive for many business owners to regulate overtime.
But Desmarais said hourly pay and limited overtime opportunities could reduce employee morale and incentives for hard work.
“How many people here were taught by their parents to always go the extra mile and to be a hard worker,” Desmarais said. “Wouldn’t it be nice if that was the way the law worked? That’s not the way the law works.”
Yet, many in the crowd said the new guidelines are not easily applied to a seasonal business.
“What is black is not always white,” one business owner said to the crowd.
To compensate employees for overtime work, one employer said she would have to reduce her employees’ work schedule.
“[The rule] is forcing me to consider dropping them to a nine-month work year, dropping their salary $8,000 and they end up going on unemployment for 12 weeks,” she said. “Is there any consideration for a seasonal business in that respect?”
Desmarais could not provide any suggestions, but said that employers should be prepared to make any changes that will comply with the law.
“It is an opportunity to roll out some new policies that don’t draw attention that you have fears about what has happened in the past,” he said.
The Maryland Department of Labor, Licensing and Regulation joined the seminar to provide general information and contact information for further questions pertaining to Maryland laws.
Melanie Pursel, executive director for the chamber, said the chamber and the OCHMRA plan on hosting more seminars on the new overtime rules before it takes effect.
The final rule was issued by the labor department May 18, impacting more than four million salaried workers who were not previously eligible for overtime pay.
More information on the new overtime rules can be found on the Department of Labor’s website.