Colorado Springs Chamber of Commerce weighs in on impact of new overtime rule

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COLORADO SPRINGS, Colo. (KKTV) - Those at the Colorado Springs Chamber of Commerce & EDC are sharing how a new rule that allows more salaried workers to earn overtime could affect businesses in Southern Colorado.

Announced Tuesday by the Department of Labor, the rule allows salaried workers making under a certain amount eligible to get overtime. Currently, the federal income floor is $684 per week or $35,568 per year. Starting July 1, 2024, that would go up to $844 per week or $43,888 per year. It would go up again January 1, 2025, to $1,128 per week or $58,656 per year.

Colorado Springs Chamber of Commerce & EDC Vice President of Government Affairs David Dazlich said this rule has been a long time in coming.

"This is sort of indicative of what we've been seeing from the Fed lately, a lot more direct and interventionist approach when it comes to inflation, wages, and overall, the felt effects of the current economic slowdown on American workers and businesses," he said.

Dazlich said Colorado businesses won't have to worry about the effect of the first increase.

"We already raised that floor and that went into effect in January of 2024, so our floor for the salaried exempted employees is already at $55,000," he said. "The concern is going to be, come January 2025, where we see that increase to $58,600 and how everyone is going to ensure that they're in compliance for exempt versus non-exempt employees."

Labor Department officials said stronger protections are needed when it comes to overtime.

"Strong overtime protections help build America's middle class and ensure that workers are not overworked and underpaid," Wage & Hour division administrator Jessica Looman wrote.

The US Chamber of Commerce released a statement when federal officials first proposed the rule in 2023. They called the regulation the wrong rule for the wrong time.

"Increasing the cost of labor even further through this regulation will add to their burdens and will be felt particularly severely among small businesses, and charitable nonprofits who can't just increase prices because they are dependent on contributions to maintain operations," Employment Policy Vice President Marc Freedman wrote.

Dazlich said consumers could also be affected by the new rule.

"Of course any time you increase business operating in compliance costs like that, there is always going to be an increase in cost that is passed on to the consumer."

Dazlich said he wouldn't be surprised if legal action is taken to prevent the rule from being implemented.

"The last time an increase of this scope was pushed forward, I believe it was 2016, maybe it was 2018, we did see a legal challenge and that increase was ultimately struck down," he said.

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