Job losses, benefit cuts, and elimination of raises and bonuses could be coming.
New Overtime Rule Would Impact 120,000 Virginia Jobs
The
Department of Labor recently handed down a new mandate extending overtime pay
to more than 10 million employees nationwide, and the Commonwealth for Fiscal
Analysis, located in Richmond, told NBC 29 that about 120,000
Virginia workers would be affected.
The
rule nearly doubles the threshold at which employees are exempt from earning
overtime pay— from $23,660 to $47,476. Under the Fair Labor Standards Act,
employees are not eligible for overtime pay if they are compensated at a
minimum wage level (now $47,476), if they are paid on a salaried basis, and if
they perform duties considered professional, administrative, or executive in
nature. Now, under the new rule, any salaried workers earning less than $47,476
will be eligible for overtime pay. NFIB estimates the new rule will impact 44
percent of small businesses.
Nicole
Riley, NFIB/Virginia state director, told NBC 29 that the retail and restaurant
industries, in particular, would be affected and could see job losses. While
she said she expects businesses will do everything they can to avoid cutting
staff, they have already absorbed cost increases resulting from Obamacare and
minimum wage hikes, so this new labor rule could be a tipping point. Even if
jobs aren’t eliminated, businesses may be forced to cut benefits or eliminate
raises and bonuses.
“It
definitely is sort of that death by a thousand cuts,” Riley said.
The
rule goes into effect on Dec. 1, 2016, so businesses need to take action now to
determine which employees will be impacted and what measures they may need to
take to make ends meet. For more information about the rule, visit www.NFIB.com/Overtime.
