It poses a unique problem in the age of smartphones.
There’s a Secret Cost for Small Business to the New Federal Overtime Rule
There’s a new wrinkle to the new federal overtime rule.
On May 18, President Barack Obama approved overtime rules that will raise the salary threshold for workers from $23,660 to $47,476 beginning Dec. 1. The news has Minnesota small business owners scrambling to figure out how they’re going to handle the increased cost of doing business.
Many business owners will resort to reclassifying their employees from exempt to nonexempt to cut down on costs. But there’s a lesser-known peril to this approach they might not be aware of.
Workers classified as “nonexempt” must be compensated for all time worked, including anything after normal business hours, according to the Minneapolis/St. Paul Business Journal. This means soon employees could be paid for checking their emails and smartphones at home or on weekends, the Minneapolis/St. Paul Business Journal reported.
About 158,000 workers in Minnesota, about 16 percent of the state’s salaried workforce, will be eligible for overtime, the Economic Policy Institute says. This worries business groups, who fear the change will force employers to move salaried employees to hourly pay and hurt employee productivity by forcing workers to do more in less time, the Puget Sound Business Journal reports.
“As the use of technology has blurred the lines that separate work from personal time, however, employers have been challenged in their efforts to ensure that timekeeping systems capture all hours worked, including the time employees may spend responding to e-mail on their iPhone at home, or using remote access capabilities on their laptop at a coffee shop,” the Star Tribune reported.
There is hope though. Legislators are introducing a bill—The Overtime Reform and Enhancement Act—meant to give small business owners more time to comply with the onerous regulation, ACHR news reported.
