What Department of Labor's Overtime Regulations Mean for Your New Jersey Small Business
A new ruling from the Obama administration’s Department of Labor could impact tens of thousands of New Jersey small business owners, forcing them to offer expanded overtime for their workers and decreasing their profitability.
At present, employers must only offer overtime to workers who earn salaries of less than $23,660. Under the proposed rule, that threshold would double to $50,440.
The Department of Labor’s Wage and Hour Division recently published its proposed rule that would “directly affect 4.6 million workers in the U.S, and total direct employer costs for Year 1 are estimated to equal $592.7 million dollars,” according to a regulatory alert from the Small Business Administration.
For small business owners in the first year alone, that would mean anywhere from “$100 to $600 in direct costs and $320 to $2,700 in additional payroll costs to employees,” according to the SBA. That’s not to mention the hour each small business will spend familiarizing themselves with the new rule, the hour per each worker in adjustment costs, and an additional five minutes per week “scheduling and monitoring each worker expected to be classified as overtime eligible as a result of the proposed rule.”
NFIB/New Jersey State Director Laurie Ehlbeck said the small business community in New Jersey cannot afford one more costly government regulation.
“This proposal will reduce employer’s incentive to promote workers and for many small businesses, will completely price them out of the opportunity to create full-time, managerial positions,” Ehlbeck says. “The overtime rule will no doubt result in significantly less flexibility for current managers and create a cumbersome record keeping environment for small employers already bogged down by administrative duties related to complying with previous government mandates.”
