New U.S. overtime rules turfed

Consulting firm says House of Representatives decision to stop new regulations after they took effect will cost business $1.4 billion US

The U.S. House of Representatives has voted to stop the Labor Department’s new overtime regulations that went into effect on Aug. 23, 2004.

The 223-193 vote was an amendment to a $142.5 billion US bill for health education and training programs. The amendment would preserve one provision of the new rules that guarantees overtime pay to workers earning less than $23,600 US or $455 US a week.

It would also protect overtime eligibility for any worker who had it before Aug. 23.

Reversal costs companies $1.4 billion US

Circadian, an international research and consulting firm, offered the following commentary on how the flip-flop was affecting organizations doing business in the U.S.:

“With the overtime regulations officially being published on April 22, 2004, and taking effect on August 23, many businesses were busy restructuring pay schedules for employees

“The time spent on implementing new policies for overtime, and then the subsequent retraction of this is possibly costing U.S. businesses billions.

“The Department of Labor initially set a one-time implementation cost to businesses nationwide for $700 million. There are numerous circumstances in which employees were to be on a new pay structure, and now these promises have been revoked.

“Circadian estimates the costs associated with the implementation, the retraction, and the negative consequences such as low morale, turnover, and absenteeism leave U.S. businesses at a loss of over $1.4 billion.”

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