Business Law
BUSINESS LAW 2
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You are the owner of a small chain of hotels, and you are concerned about the United States Department
of Labor�s (DOL) new rules under the overtime provisions of the Fair Labor Standards Act. In order to
be eligible for one of the white-collar exemptions to the overtime rules, you must pay an employee a
minimum weekly salary of $455 per week, or $23,660 per year, whereas the previous threshold was $250
per week. Employees making less than $455 per week generally cannot be exempt. This will cost you
money either in overtime pay or higher salaries. Can you challenge this new DOL rule? How would you
go about challenging it? (26 points) (A 1-page response is required.)
Business Law
Whereas the overtime rules present several opportunities for both employers and employers, it is
important to note the problems presented by these rule. Thus, the new DOL rule can be
challenged in line with the challenges it presents to small businesses.
Prior to the enactment of the DOL rule, there was no requirement for employers to pay overtime
to particular kinds of managers and administrators who worked over 40 hours a week, as long as
the employers classified these managers and administrators as salaried employees, and as long as
they earned over $23,660 per year (Atkinson, 2015). The fact that the new rule requires
employers to reclassify employees implies that many workers with administrative or managerial
duties making over $23,661 per year will be greatly affected. Whereas larger businesses tend to
have proper classifications of their workers, smaller companies, such as our small chain of
hotels, which do not have Human Resource departments with experienced specialists, have
higher chances of misclassifying workers. It is important to challenge this law because it will
even end up being disastrous to a significant percentage of employees. Most of the reclassified
employees will end up losing benefits, status, flexibility and advancement opportunities. As for
employers, overtime rules will drive up their costs and ultimately limit opportunities for moving
up into management. Businesses will be forced to reduce hiring, cut working hours, reduce
benefits and increase prices for goods or services.
BUSINESS LAW 3
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Since these rules were passed by the Administration, we can challenge them by presenting our
opinions to the Republican-run Congress, which may seek to counter the rules through
legislation. Even though the court has approved the rules, the prospects of amendments being
made are high as long as Congress approves.
Reference
Atkinson, W. (2015). Administration’s proposed rule on overtime pay challenging for small
business.
